MPC Morning Call 19th January 2026 – Stocks finish lower as Trump and Fed concerns outweigh healthy earnings
Stock finish the week lower as solid quarterly earnings and healthy economic data were offset by concerns about fresh new tariffs and uncertainty over Federal Reserve leadership.
WATCH ON YOUTUBE MPC Morning Call 19 th January 2026 – Stocks finish lower as Trump and Fed concerns outweigh healthy earnings Stock finish the week lower as solid quarterly earnings and healthy economic data were offset by concerns about fresh new tariffs and uncertainty over Federal Reserve leadership. President Donald Trump reignited trade tensions by warning that he may impose tariffs on nations opposing U.S. interest in Greenland, a territory he described as vital to national security. His remarks, made during a White House health-care event, raised concerns of renewed protectionism just as markets were stabilizing from the previous year’s tariff hikes. At the same event, Trump signalled uncertainty over Federal Reserve leadership, saying he preferred Kevin Hassett to remain as head of the National Economic Council rather than take on the Fed chair role—a surprise to many who viewed Hassett as a market-friendly choice. Meanwhile, the U.S. banking sector kicked off the fourth-quarter earnings season on a mixed note. PNC Financial posted a 25% surge in profit driven by loan growth and dealmaking activity, while Regions Financial missed profit expectations despite reporting higher revenue. Investors are now turning to upcoming earnings from major companies such as Netflix, 3M, U.S. Bancorp, and Johnson & Johnson, with tech giants like Intel, Visa, and Abbott Laboratories also set to report later in the week. The sector remains buoyed by TSMC’s record-high profit, reflecting ongoing strength in the semiconductor industry powered by AI-related demand. Economic data reinforced the view that the U.S. economy remains resilient. December industrial production rose 0.4%, and jobless claims fell to 198,000, both exceeding forecasts. These results, along with cautious comments from several Federal Reserve officials, bolstered expectations that interest rates will remain on hold through the first half of the year. Chicago Fed President Austan Goolsbee and others reiterated their focus on inflation control, while Fed Vice Chair Philip Jefferson suggested that current policy is now neutral, signalling a steady approach amid balanced growth and cooling price pressures. Corporate Earnings Taiwan Semiconductor Manufacturing Co. (TSMC) +5% rose over 5% after the company reported stronger-than-expected fourth-quarter profits, driven by booming demand for artificial intelligence chips. Net profit hit a record T$505.74 billion (US$16 billion), surpassing estimates, while revenue rose to T$1.046 trillion (US$33 billion). Despite the strong results, TSMC projected significantly higher capital spending for 2026—between US$52 billion and US$56 billion, up from US$40.9 billion in 2025—to expand capacity for AI chips, particularly overseas. Executives cautioned that margins could weaken amid these investments. The company’s 3-nanometer processors contributed over a quarter of wafer revenue, with growing demand from Apple and Nvidia fueling results. TSMC also aims to expand its U.S. presence, targeting 20–30% of total output from its Arizona facilities. Government Bond Yields Commodities, Energy & FX ASX Overnight: SPI 8879 (-0.01%) The Day Ahead: The market will we quiet due to the long weekend in the US. Trumps announcements may see some weakness due to uncertainty. The day ahead Biotech company PolyNovo has reported unaudited first-half FY26 group sales of $68.2 million, up 26 per cent on the same time last year. City Chic Collective reported preliminary first-half revenue of $69.2 million, down 0.5 per cent on the previous corresponding period, with ANZ revenue growth offset by weaker sales in the Americas. NextDC says the development application for its M4 Melbourne Data Centre, located at Port Melbourne in Victoria, has received the necessary planning permit from the Victorian minister for planning.
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