Rotation, Regulation, & Risk - Markets Find Their Footing to Start 2026: The Weekly Sift Stack - 1.12.2026 (Issue 10)

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Index Tracker Year-To-Date Performance 1.9.2026 Market Close:

• S&P 500 TR: 1.8% - Price: 6,966.28

• NASDAQ TR: 1.85% - Price: 23,671.35

• Russell 2000 TR: 5.75% - Price: 2,624.22

• MSCI International EAFE TR: 2.03% - Price: 2,951.15

• Bloomberg U.S. Aggregate Bond Index TR: 0.15% - Price: 2,352.39

• 10-Year Treasury Yield: 4.185%

• 30-year Mortgage Rate: 6.16%

• Gold: 2.89% - Price: $4,473.00 per oz.

• Bitcoin: 1.89% - Price: $90,513.10

• U.S. Dollar Index: 0.86% - Price: 99.13

• Crude Oil: 2% - Price: $58.62 per barrel

• Core Inflation:

  • Year Over Year: 2.8% - 11.30.2025

  • Month Over Month: 0.2% - 9.30.2025

• Consumer Price Index

  • Year Over Year: 2.6% - 11.30.2025

  • Month Over Month: 0.3% - 9.30.2025

Index Tracker Notes:

Both the stock and bond markets are having a strong start to 2026 with the S&P 500 being up 1.8% and the Bloomberg US Aggregate being up 0.15%. In other news, we are seeing the Russell 2000 lead the way in performance with a 5.75% return as some note a “great rotation” from big tech to the broader markets. The Russell 2000 includes U.S. companies with under $10 billion in market cap, these higher risk stocks have historically benefited from lower interest rates that make borrowing cheaper and thus improve small-cap earnings.

Stock of The Week: Capital One Financial Corp (COF)

Capital One was a steady grower throughout 2025 with a lot of excitement and high expectations as they bought Discover and became the largest credit issuer in the U.S. by loan value. So for those who don’t know, Capital One started solely as a credit card company back in 1994 but has since evolved into a full service bank.

The U.S. currently has 1.23 Trillion in outstanding credit card debt as of late 2025. Capital One holds about $270 billion of that debt, and they added just shy of $100 billion this past summer from Discover. That deal added $98 billion in credit card loans and that has already increased quarterly revenue by 23% and a 25% increase to Net Interest Income. Net Interest Income (NII) is the profit a financial institution makes from its core lending and borrowing activities, calculated as the difference between the interest earned on its interest-bearing assets (like loans) and the interest paid out on its interest-bearing liabilities (like deposits). Essentially, it's the revenue from interest collected minus the cost of interest paid, reflecting the profitability of its primary business before other expenses.

Capital One’s balance sheet is well positioned to withstand a potential deterioration in the economy… now what it might not be able to withstand, President Trump. Trump announced over the weekend “effective January 20th”, a one year cap on credit card interest rates of 10%.

Capital One Financial Corp (COF) Key Facts

• CEO: Richard Fairbank

• Founded in 1994 by Richard Fairbank & Nigel Morris in Richmond, Virginia

• Market Cap: $148 Billion

• Sector: Financial Services - Credit Services

• 52-week range: $143.22 - $259.64

• Morningstar Economic Moat Rating: Narrow

• PE Ratio: 98.87

Capital One Financial Corp (COF) vs SPDR Shares S&P 500 ETF (SPY) over the past 5-years

Weekly Insight: When The Fed Gets Political - Powell, Trump, & The Fallout

Fed Chair Jerome Powell said he’s under criminal investigation tied to a $2.5b renovation of the Fed’s DC headquarters, escalating tensions with President Trump amid ongoing disputes over interest rates. Powell’s position is that the probe is retaliation for maintaining Fed independence, while Trump stated on Sunday that he is not aware of the probe.

The market reacted with the S&P 500 down premarket on Monday but rebounded by the afternoon, while gold rallied on safe-haven demand.

Banks Lead The Market, Washington Enters The Chat

Big Banks are coming off a blockbuster 2025, with record profits, surging trading fees – largely outpacing the S&P 500. JP Morgan is starting earnings seasons this week as Jamie Dimon draws closer to his 70^th birthday – following are Goldman Sachs, Morgan Stanley, Citi Group, and Capital One. Earnings momentum, easing regulation, rebounding deal activity, and hopes for lower rates are setting up a strong 2026 case, but rising valuations mean expectations are sky high, with some on Wall Street warning that the trade may be getting too perfect. Interestingly, we are already experiencing our first buffer to these valuations!

Trump is making a push on affordability by proposing a 10% interest cap on credit cards for 1-year this has put banks into a bit of a bind, as credit cards are a major source of revenue. This cap requires approval from congress. Banks and other oppositional voices warn that financial institutions will offer less credit opportunities – reducing spending that drives 2/3 of economic activity (source: CNBC).

As of about 1 PM on 1/12/2026 – we’re seeing the State Street Financial Select SPDR ETF down around 1%.

Post-Maduro Surge: Venezuela’s Caracas Stock Exchange Rips Higher

The Caracas Stock Market Exchange has exploded with former Venezuelan president Nicolas Maduro’s ousting last week - growing from 1455 on 12/15/2026 to 6009.58 as of 1/9/2026.

Paramount Turns Up The Heat: Lawsuit, Proxy Fight, & a $72b Media Power Shift

Paramount just turned up the pressure in its bid for Warner Bros. After WB’s board rejected Paramount’s revised offer, the group fired back with a lawsuit against WB and CEO David Zaslav, while also signaling a proxy fight to win over shareholders. The stakes are even higher after WB agreed in December to sell HBO Max and WB to Netflix for $72b, potentially reshaping the entire media landscape.

Did You Know?

Sift Stack Flashback:

On January 12, 2024 Producer Price Index (PPI) for final-demand goods fell for the third consecutive month, an indicator that inflationary pressured in the pipeline were easing. The PPI measures the average change over time in the selling prices received by domestic producers for their output. The prices included in the PPI are from the first commercial transaction for many products and some services.

Poll Question

Last week’s poll results - “Where do you think the S&P 500 will end in 2026?”

1. 67% Voted - 8,000 (16.7%)

2. 33% Voted - 7,000 (0.0%)

   

    

Feel free send feedback or further input on the poll question to [email protected] or [email protected]. We would love to hear from you!