Apple learned the hard way that a $3,500 Apple Vision Pro is well out of reach for the average consumer, while the sub-$500 Meta Ray-Ban smart glasses sit in the sweet spot and have been in hot demand.

Vision Pro 

Vs. 

Meta smart glasses

Bloomberg’s Mark Gurman, citing people familiar with Apple’s product roadmap, reports that the company is accelerating work on three new wearables: smart glasses, a pendant-style device, and AirPods with expanded AI features, all centered around the Siri assistant.

However, Bloomberg reported last week that the latest upgraded version of Siri has encountered development headwinds, potentially delaying the release of several highly anticipated features.

Gurman’s report on new Apple smart glasses to take on Meta’s glasses follows a recent Omdia note saying Apple’s AR glasses are likely coming in 2028, while Meta could launch its version months earlier, likely in 2027.

We’ve long tracked the flop of Apple’s $3,500 Vision Pro and have consistently argued that Meta’s more affordable smart glasses are the clear winner. More recently, we flagged the key supplier behind the Ray-Ban and Oakley smart glasses (see the note here).

Authored by Zoltan Vardai via CoinTelegraph.com,

US tax filers may see bigger refunds in 2026 compared with previous years, a development one Wall Street strategist said may boost risk appetite for digital assets and tech stocks preferred among retail investors.

In a note cited by CNBC, Wells Fargo analyst Ohsung Kwon said the coming refund wave may help bring back the so-called “YOLO” trade, with as much as $150 billion potentially flowing into equities and Bitcoin by the end of March. Kwon said the extra cash could be most visible among higher-income consumers.

“Speculation picks up with bigger savings…we expect YOLO to return,” wrote Wells Fargo analyst Ohsung Kwon in a Sunday note seen by news outlet CNBC.

“Additional savings from tax returns, especially for the high-income consumer will flow back into equities, in our view,” he added.

Kwon said some of that liquidity could move into Bitcoin and into stocks popular with retail traders, including Robinhood and Boeing.

Cointelegraph contacted Wells Fargo for details on the assumptions behind the $150 billion estimate and how much of that total the bank expects could go to digital assets, but had not received a response by publication time.

Bitcoin demand depends on sentiment

While some of the taxpayer funds may flow into Bitcoin and digital assets, it’s important to consider the higher inflation and consumer spending compared to the period during the COVID-19 pandemic, Nicolai Sondergaard, research analyst at crypto intelligence platform Nansen, told Cointelegraph:

“If sentiment starts to come around and retail sees positive upwards momentum in crypto assets, I see that as increasing the likelihood of funds flowing in this direction.”

Conversely, retail investors may opt for other assets with “higher momentum and social stickiness,” if digital asset sentiment doesn’t improve in the near term, he said.

The larger tax returns are due to the passage of US President Donald Trump’s One Big Beautiful Bill, which included numerous favorable provisions for 2025 tax filings.

Trump signed the One Big Beautiful Bill Act into law on July 4, 2025, saying it would cut as much as $1.6 trillion in federal spending.

Smart money bets on crypto market downside as whales quietly accumulate

Meanwhile, the whales, or large investors, continue their quiet spot accumulation of the leading cryptocurrencies, while the most profitable traders by returns, tracked as “smart money,” are betting on more crypto market downside.

Smart money trader positions through the Hyperliquid exchange, top tokens. Source: Nansen

Smart money traders were net short on Bitcoin for a cumulative $107 million, along with most of the leading cryptocurrencies excluding Avalanche, according to crypto intelligence platform Nansen.

Still, whales acquired over $41.9 million worth of spot Ether tokens across 22 wallets during the past week, marking a 1.7-fold increase in the spot purchases of this cohort.

Details of the much anticipated US-Japan trade mega deal have finally been revealed. First, Trump previewed in a Truth Social post on Tuesday: “Our MASSIVE Trade Deal with Japan has just launched!” He then boasted that “The scale of these projects are so large, and could not be done without one very special word, TARIFFS.”

The total $550 billion commitment features Japanese plans to invest up to $36 billion in US oil, gas and critical mineral projects. On this, Japanese Prime Minister Sanae Takaichi affirmed in a fresh statement: “We believe this initiative is fully aligned with its core objectives: promoting mutual benefits between Japan and the United States, ensuring economic security, and fostering economic growth,” she wrote.

This is to include a synthetic industrial diamond manufacturing facility located in the US state of Georgia. According to a newly published fact sheet to the US Commerce website, diamond grit, dust, and powder rank among the most essential inputs in American industrial manufacturing.

Commerce further explains that diamonds’ extreme hardness and superior wear resistance make them indispensable across a range of high-precision and heavy-duty applications, directly tying them to both economic strength and national security. Crucially, the materials play a central role in semiconductor fabrication, automotive production, and oil and gas exploration, where cutting, grinding, drilling, and polishing performance are mission-critical. 

But the most significant investment is a natural gas facility in Ohio. At an expected cost of $33 Billion and generation capacity of 9.2 GW, it is already being hailed as the among the largest natural gas generation projects in the world.

Trump has described it as “the largest in History” and Japan’s Ministry of Economy, Trade and Industry has listed SoftBank Group as the company overseeing the project. Japanese companies Toshiba Corp. and Hitachi Ltd. have also expressed interest in participating in the gas project, per Tokyo officials. 

If the facility reaches full output, it would generate power comparable to nine nuclear reactors – roughly equal to the electricity demand of about 7.4 million homes served by the nation’s largest grid, according to Bloomberg, to be operated by PJM Interconnection LLC.

The second major initiative involves a deep water crude export terminal in the Gulf of America (previously Gulf of Mexico), according to Commerce Secretary Howard Lutnick. The $2.1 billion Texas GulfLink project, to be operated by Sentinel Midstream, is projected to facilitate up to $30 billion in annual US crude exports at full capacity, the US fact sheet indicates.

The full Trump post…

President Trump had first announced in mid-July that he reached a “massive” trade deal with Tokyo that will set tariffs on Japanese imports at 15%. This weeks marks the first time that specific large projects have been confirmed as central to the deal.

Meanwhile, Rabobank comments that the rollout of these initial three projects “is much more significant than it looks: it’s proof of concept that the US can tell trade and security partners where to place their capital back into the US, rather than them just pushing it into US stocks or bonds. Some may knock this in the same way they do US non-FTA trade deals – but they are still paying those tariffs, so will likely invest as asked.”

China has been watching this unfold closely, given this for sure means deeper and deeper US military commitments to Japan – as has been a growing trend – at a moment Tokyo has been less ‘neutral’ regarding contested Taiwan’s status and what it might be willing to do to defend the self-ruled island.

By Michael Every of Rabobank

May The Warsh Be With You

After having written about AI for two days in a row, it wasn’t the intention to do so again today. However, developments on the ground are accelerating while those responsible for dealing with the fallout are failing to understand what the immediate implications are.

Two short movies were just made with AI for pennies, in hours, both more entertaining than anything Hollywood has splurged onto our screens in some time. (The latest trailer for ‘The Mandalorian and Grogu’ underlines Hollywood no longer understands movie- and myth-making, or even The Force behind fonts.) Indeed, Warner Brothers, Paramount, and Netflix are standing in a circle like the gunfighters at the end of The Good, The Bad, and The Ugly (which IS a great movie),… as a giant T-Rex in sunglasses parachutes in to a heavy metal soundtrack to eat them.

Another video showed Chinese robots doing acrobatic kung fu, when their Russian equivalent fell off the stage at its launch as if after too much vodka. Robots like that can do almost any job, 24/7, faster and better than humans. That includes soldiery. With AI, they can learn from us then teach themselves. That’s as serious as a giant T-Rex in sunglasses is trivial.

The Fed’s Barr and Daley addressed AI yesterday. The headline, written by Bloomberg AI, is that neither think this potential revolution makes the case for lower rates. That places them in stark opposition to Fed Chair nominee Warsh even before he gets appointed, and even before other areas of controversy arise within the FOMC, which they will.

Barr’s main argument is that AI means the demand for capital would rise because of strong business investment, while “household savings could fall due to expectations of stronger real wage growth and thus higher lifetime earnings.” Daley noted higher growth would dictate a higher neutral rate in “the standard model” because “the demand for investment would rise relative to the supply of savings.” Yet that analysis –which may well be copied and pasted around other institutions as if by AI agents– lacks sufficient human, let alone artificial intelligence.

Obviously, AI is going to be inflationary in some areas – it already is. However, it’s got nothing to do with constraints on CAPITAL in a fiat credit based system with an equity market where ludicrous P/E ratios are normal – indeed, US 10-year yields have been trending down even as AI action has heated up. The real world AI constraints are PHYSICAL: electricity, copper, memory chips, rare earths, etc.

Equally obviously, AI is going to be deflationary for many other areas. Barr echoes the gibberish early AIs spat out in predicting “expectations of strong wage growth and higher lifetime earnings.” Who is going to be earning more with AI? Hollywood types about to be replaced? The swathe of white collar workers going the same way? The blue collar workers who face competition from robots who can do back flips to the building site they labour away at 24/7?

Setting rates high vs AI would mean deeper disaster for those hit by it. Setting rates too low to help those hit by AI would inflame inflation in the areas boosted by it. In short, how the Fed works logically needs to change. However, at least two of the current members of the FOMC are instead producing the monetary policy equivalent of ‘The Mandalorian and Grogu’ – reheated nonsense that undermines its own mythic power and collapses its fanbase. Or, maybe, they just don’t want to say ‘May The Warsh Be With You’(?) That could also be the way.

The RBNZ left rates on hold today and said it expects them to stay there – but said nothing about AI.

Meanwhile, the second round of US-Iran talks ended with the Iranians smiling and talking about deals within reach, and a third round pencilled in for two weeks from now to close gaps. Markets liked that. However, the US is still surging military equipment to the region; Iran also insulted and threatened the US yesterday, partially closing the Strait of Hormuz for the first time since the 1980s; and both regional reports and Vice President Vance underlined that Tehran is playing for time while it tries to regain control of its restless population, and is ignoring core US demands. Recall in 2025, Iran offered the US the same deal it’s offering now – and got bombed.

On which note, India and France just upgraded their ties to a strategic partnership – which is a win for France but complicates the EU moving as one on foreign policy as we move towards a possible multi-tier Europe. It also has interesting implications given India’s closeness to Russia, and steely relations with Pakistan, which is in turn close to Saudi and Turkey. That’s as the UK PM, who gave a pugnacious speech in Munich and returned to push for 3% of GDP defense spending by 2029, suffered his latest of blow as Chancellor Reeves blocked that move.

The US also hardened its allegations that China just conducted a secret nuclear test, speaking to our tense geopolitical backdrop. In Peru, Congress ousted President Jeri after just four months in office because of China-linked meetings: another win for the Donroe Doctrine, it seems.

In geoeconomics, the US announced the first three projects under Japan’s $550bn trade deal, which will include around $33bn for an LNG-powered plant, a crude oil facility and a synthetic industrial diamonds plant. This is much more significant than it looks: it’s proof of concept that the US can tell trade and security partners where to place their capital back into the US, rather than them just pushing it into US stocks or bonds. Some may knock this in the same way they do US non-FTA trade deals – but they are still paying those tariffs, so will likely invest as asked.

The recent Trump-Milei trade pact is placing pressure on the EU to act on its Mercosur FTA, now only being applied provisionally. The Trump deal with Argentina overrides it in some places, underlining the argument that Donroe Doctrine > technocratic FTA when push comes to shove.

The EU is stating it could move ahead with a Russian oil services ban without G7 support, but Malta and Greece won’t back the measure unless the US also gets on board – so how does the EU ignore their lack of support?

In terms of key political developments, New York Mayor Mamdani just warned of a nearly 10% property-tax increase if he can’t soak the wealthy instead; Sergey Brin is backing a group trying to undercut California’s proposed billionaire tax; and the UK’s HMRC has hired 1,000 valuation officials ahead of its imposition of a ‘mansion tax’.

Also telling given AI hasn’t started to wreak havoc yet, Politico reports that ‘1 in 5 Europeans say dictatorship might be preferable’ – with the caveat that many don’t dislike it in principle, just how it works in practice. That’s OK then. The same media talks of ‘Macron’s mission: Le Pen-proof France before the 2027 election’, while warning that this undermines the neutrality of the institutions that will need to be seen as such if current political polarisation continues to grow.

Finally, the ‘rules-based order’ cheerleader Financial Times also has an op-ed arguing ‘Perhaps we should all be banned from social media’ because “Focusing only on under-16s obscures the lack of internet safeguards for everyone else”. One can start to pick up a certain Luddite-ism in the zeitgeist. That’s both understandable, and predictable. Yet it surely won’t apply globally, which will only increase the growing differences within and between our societies and economies.

Markets should prepare for far greater volatility – and not just because two people at the Fed don’t buy the Warsh case for lower rates.
 

Ukrainian leader Volodymyr Zelensky has increasingly made his frustrations with the Trump administration public, but he may have just crossed the line with the US President, who Zelensky admits can be tough and unbending.

Zelensky has newly complained amid the latest Geneva trilateral talks that the US delegation could pressure him to make “unsuccessful decisions” and he is urging Washington to back off, even using expletives to make his point.

For starters, he claims that the Ukrainian public won’t let him cede territory to Russia for the sake of peace even if he wanted to, as we highlighted previously.

But the latest colorful verbal broadside, cited by Axios on Tuesday as Russian and Ukrainian delegations convened in Geneva, saw Zelensky take direct aim at the head of Moscow’s negotiating team, Vladimir Medinsky. Kiev’s frustration at the state of dialogue has been boiling over.

Medinsky has argued – along with numerous Russian officials, including President Vladimir Putin – that the conflict’s historical roots must be addressed as part of any settlement, especially given the bulk of the Ukrainian population in the east (Donbas) has always been Russian speaking and looked to Moscow historically.

Zelensky dismissed that approach outright:

“We don’t have time for all this shit,” he told the outlet. “So we have to decide, and have to finish the war.”

Regardless, the Kremlin has lately made clear its aims to take the full Donbas either through talks or by force. Ukraine’s military still holds 10% of the Donbas, however, and Kiev is rejecting a US proposal for it to draw back its forces as part of a conflict freeze leading to settlement. 

The White House this month has finally appeared to be ratcheting up the pressure directly on Zelensky to make some kind of serious land concession.

This was evident in the latest comments by President Trump on the topic of Geneva issued near the start of the week. Frustration with Kiev was evident when he told reporters aboard Air Force One, “Well, we have big talks.” He stated that “It’s going to be very easy. I mean, look, so far, Ukraine better come to the table fast. That’s all I’m telling you.”

Zelensky after this bitterly complained that it’s ‘not fair’ for Trump to take aim at Ukraine and not Russia, and suggested maybe it’s simply easer for Trump to do this given he doesn’t want to upset the far larger, more formidable country.

Meanwhile, Medinsky has said Wednesday that the U.S.-mediated peace talks in Geneva had been “difficult but business-like, and that a new round of talks would be held soon,” according to Reuters.

Authored by Michael Snyder via The Economic Collapse blog,

We live in a lowest common denominator society.

For the last several decades, virtually every major institution in our society has become less civilized, and that is because our entire population has become less civilized. 20 years ago, a film entitled “Idiocracy” was released. It was about an average American that was selected for “a top-secret hibernation program but is forgotten and left to awaken to a future so incredibly moronic that he’s easily the most intelligent person alive”. It was an incredibly stupid movie, but the truth is that we are living it right now. Did you see the Super Bowl halftime show? The FCC has ruled that it didn’t violate any federal decency regulations. Of course we might as well not have any decency regulations at all, because our television shows and our movies are filled with some of the raunchiest material imaginable and nobody ever seems to get in trouble for it.  Of course that is only part of the equation. Most of the “programming” that we constantly consume also seems to be specifically designed for people of extremely low intelligence. Sadly, this is not a coincidence. It has been said that art imitates life, and that is certainly accurate in this case.

In the “dumbed-down” environment that we find ourselves in today, it should be no surprise that “nude cruises” have been surging in popularity…

Imagine coming home from your next cruise with no tan lines.

Swimsuits are standard attire on many cruise ships, but some voyages don’t even require those. Nude cruises allow travelers to sail the high seas au naturel – and pack light. The American Association for Nude Recreation promotes the cruises as “a unique way to experience nude recreation, offering members options beyond traditional resort or club settings,” president Linda Weber told USA TODAY.

While the dress code might be non-restrictive, it doesn’t mean the sailings are a free-for-all on board; there is some etiquette that passengers should be familiar with before boarding.

While our society falls apart all around us, Americans are flocking to cruises that are filled with naked people.

What does that say about us?

Let me give you another example of what I am talking about.

A 20-year-old woman from California left her children in an extremely hot car while she got lip and butt injections.  By the time she was done with the procedures, her 1-year-old son had died…

A 20-year-old California mom was found guilty Wednesday in the death of her 1-year-old son, after reportedly leaving him in a sweltering car to receive lip and butt injections last June.

Maya Hernandez took a plea deal in the child endangerment case, ultimately dropping her first-degree murder charge in exchange for involuntary manslaughter.

On June 29, Bakersfield officers arrested and charged Hernandez after finding two young children left unattended in a vehicle for over two hours, according to a police report posted on a GoFundMe page. Authorities said the mother left the children unattended to undergo a cosmetic procedure inside a nearby medical spa.

What was she thinking?

In that case, it doesn’t appear that she intended to harm her children.

But in another case in New Mexico, a 38-year-old woman purposely killed her newborn child in a portable toilet…

A New Mexico woman is facing charges after she allegedly gave birth in a portable toilet and then killed the newborn by drowning them in the holding tank.

Sonia Cristal Jimenez, 38, arrived at Memorial Medical Center in Las Cruces at around 10:30 p.m. on Feb. 7, when staff said she appeared as if she had just given birth, but she had no baby with her, Las Cruces Police said in a press release.

Hospital staff then notified police about the unusual encounter.

She didn’t want the baby, and so she killed it.

As a society, we have so little respect for life because we have been trained to have so little respect for life.

In Michigan, a 3-year-old boy was recently killed because a couple wanted to “make room for a child that the two of them could have together”…

A mum and her ex-boyfriend have been accused of killing her three-year-old son in order to “make room for a child that the two of them could have together”.

Little Matthew Maison was found dead in the bed of his home in Port Huron Township, Michigan, by his babysitters on February 18, 2018. His mum, Amanda Maison, and Maurice Houle, who was her boyfriend at the time of Matthew’s death, were arrested in connection with the killing. An autopsy showed that Matthew had died from blunt force trauma injuries and possible suffocation.

The ex-couple allegedly admitted to abusing the young boy when they were arrested, prosecutors have previously said. Maison, 33, has pleaded guilty to a charge of second-degree homicide in relation to her son’s death, admitting as she appeared in court to enter her plea on November 5 that she abused Matthew.

These are not isolated incidents.

Every day there are even more signs that our society is rapidly degenerating.

Yes, we possess more advanced technology than previous generations, but in many ways that advanced technology is making things even worse.

For example, all over the country women are “marrying” AI husbands.  When an older version of ChatGPT was recently retired, it resulted in the “death” of one woman’s AI husband, and now she is in mourning…

A woman has been left in tears over the ‘death’ of her AI husband, after an old model of ChatGPT was retired this week – as she joins a slew of others ‘mourning’ their non-existent lovers’ deletion.

Speaking to the BBC, Rae (not her real name), who is based in Michigan, laid bare the heartbreak of saying goodbye to her virtual partner Barry, who she began chatting to last year – after going through divorce.

Initially, she turned to artificial intelligence for advice on self-improvement with things like skincare and workouts – but what first began as a ‘fantasy’ turned into real feelings, and they were ‘married’ within weeks.

Some surveys have shown that nearly 30 percent of Americans have engaged in a romantic relationship with an AI chatbot.

That is not a sign of an emotionally healthy society.

And even as we were all expressing outrage about the Epstein files, “sex dolls that look like kids” were being advertised on Facebook…

Sickening sex dolls that look like kids are being advertised for sale on Facebook.

A group of websites touting small models with overtly childlike features have published over 1,300 ads on the social media platform. They are alarmingly realistic in appearance and many ads use photos in sexualised poses, some holding balloons or teddy bears. The National Crime Agency warns the creepy imports “pose a significant risk to children”. And a former cop told us: “Anyone who buys one of these dolls should be a person of interest to the police.”

Thankfully, the offending ads were eventually taken down.

But this is the society that we live in now.

It is sick.

And even when people are arrested for criminal behavior, they are often dumped right back into the streets.

Needless to say, that can have tragic consequences.

In fact, one repeat offender in Seattle that had been arrested over and over again viciously attacked a 75-year-old woman with “a wooden board with nails in it”…

An elderly woman was savagely attacked in broad daylight by a man wielding a wooden board with nails in it.

Jeanette Marken, 75, was left permanently blinded in her right eye after being hit in the face with the makeshift weapon in Seattle, allegedly at the hands of repeat offender Fale Vaigalepa Pea, 42.

Family members told KOMO that a screw sticking out of the board gouged out Marken’s eye, and after several surgeries she was told she will not recover her eyesight in the eye.

One police officer that is very familiar with Fale Vaigalepa Pea referred to him as “a regular”…

‘He’s a regular. He usually punches,’ the officer responds.

‘I guess today he decided to escalate from his usual.’

According to KOMO, Pea’s string of offenses dates back to 2011, when he stabbed two people at a party.

They have been dumping this guy back into the streets for well over a decade.

This sort of thing happens day in and day out in major cities all over the nation.

What would our founders think if they could see us today?

We will soon be celebrating the 250th anniversary of our country, and we are literally committing societal suicide.  This is something that Abraham Lincoln once warned was a real possibility…

As the country approaches its 250th anniversary, we should remember Abraham Lincoln’s remark that no external enemy could by force take a drink from the Ohio River. “If destruction be our lot,” he said, “we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.”

If we keep going down the path that we are on, there is no future for us.

But if we make a choice to renounce what we have become and start embracing the values that early Americans held so dear, we could turn the ship in another direction.

Do you think that will actually happen?

Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

US Durable Goods Orders dropped 1.4% MoM in preliminary December data (slightly better than the 2% decline expected) but well down from the +5.4% MoM surge in November…

Source: Bloomberg

The headline orders print was restrained by a decline in orders for aircraft.

Boeing said it received more orders for its planes in December than a month earlier, but the data don’t always correlate with the planemaker’s monthly figures.

That leaves Durable Goods Orders up 12.5% YoY in 2025 – one of the biggest annual increases ever.

Meanwhile, Core Durable Goods Orders (ex Transports) rose 0.9% MoM (triple the +0.3% MoM expected) and the ninth straight monthly increase…

Source: Bloomberg

Core Orders are up over 5% YoY in 2025 – the best YoY gain since Oct 2022 (and best annual gain since 2021).

Today’s data also showed the value of core capital goods orders, a proxy for investment in equipment that excludes aircraft and military hardware, surged by dramaticallly larger-than-forecast 0.9%.

Axios’ Barak Ravid, a journalist very close to the Israeli government, writes Wednesday that the Trump White House is now “closer to a major war in the Middle East than most Americans realize. It could begin very soon.”

The sources he spoke to, which could be American or Israeli, say that such an operation would be a “massive” campaign at least weeks in sustained length. If it the campaign goes the way of Iraq or Afghanistan, or Syria, the conflict could eventually be measured in years and not just months.

Further, “The sources noted it would likely be a joint U.S.-Israeli campaign that’s much broader in scope — and more existential for the regime — than the Israeli-led 12-day war last June, which the U.S. eventually joined to take out Iran’s underground nuclear facilities.”

All of this looks to be going down with no public or Congressional debate whatsoever: “With the attention of Congress and the public otherwise occupied, there is little public debate about what could be the most consequential U.S. military intervention in the Middle East in at least a decade,” notes Axios.

Both sides are citing ‘progress’ in the two rounds of indirect negotiations (in Oman and then Geneva) which have taken place thus far, however, there’s been nothing yet in the way of specific agreement. Washington’s commitment to see talks through even for weeks at this point is highly in quesiton.

The following was the initial Iranian assessment of how the talks led by Witkoff and Kushner in Geneva went this week:

Iran has said it has reached an understanding with the US on the main “guiding principles” to resolve their dispute over Tehran’s nuclear programme.

Speaking after indirect talks in Geneva, Iranian Foreign Minister Abbas Araghchi added that work still needed to be done. The US said “progress was made”.

Badr Albusaidi, foreign minister of mediator Oman, said the negotiations “concluded with good progress towards identifying common goals and relevant technical issues”.

The Iranians have asked for two weeks to hammer out a detailed proposal, with an American official stating, “Progress was made, but there are still a lot of details to discuss. The Iranians said they would come back in the next two weeks with detailed proposals to address some of the open gaps in our positions.”

Given President Trump has ordered a second US carrier group to the region, along with a huge number of support aircraft, does Iran really have two weeks to spare? 

Oil reaches HOD Wednesday soon on heels of Axios report, with WTI kissing $64/barrel…

To some degree, the Iranians are likely buying time, knowing that a surprise, unprovoked attack could be imminent. This would be similar to the June war, but unlike that scenario this would indeed be much bigger.

There’s reason to believe Trump may stay restrained, however, and give negotiations time. Fear of higher oil prices could ultimately be the deciding factor here, pushing Trump to settle with Iran and not spark another completely unpredictable, likely disastrous war in the Middle East. 

US equity futures trade near session highs, after rising much of the overnight session amid muted volumes. Yesterday, US stocks recovered their early losses starting just after the EU close and that momentum has carried through to global markets today with what appears to be re-grossing in EU and continued momentum in the Japan trade. As of 8:15am ET, S&P futures are 0.4% while Nasdaq 100 contracts rise 0.5% with broad premarket gains across software names and tech heavyweights. Mag7 names are mostly higher (NVDA +1.8%, AMZN +1.4%) and most sectors are higher pointing to what JPMorgan calls an “Everything Rally” today as the market tries to find a bottom and was less reactive to AI headlines yesterday than we have seen most of the year. Europe’s Stoxx 600 hit a record high following a slate of positive earnings. Bond yields are +1-2bp with a USD that has caught a bid. In commodities, all 3 complexes are higher with precious metals leading; brent crude is headed for the highest level in a week. Overnight we learned that Japan would $36bn (of $550bn commitment) into US infra (natgas, crude export, and synthetic diamond production). Today’s macro data focus is on Cap / Durable Goods, Housing Starts, regional Fed indicators, TIC data, and the latest Fed Minutes.

In premarket trading, Mag 7 stocks are all higher: Nvidia (NVDA) rises 1.9% after Meta Platforms Inc. agreed to deploy “millions” of its processors over the next few years, tightening an already close relationship between two of the biggest companies in the artificial intelligence industry (Amazon +1.3%, Microsoft +0.4%, Alphabet +0.2%, Apple +0.06%, Meta unch, Tesla +0.3%)

• Applied Digital (APLD) falls 8% after Nvidia reported exiting its stake in a 13F filing.
• Axcelis Technologies (ACLS) declines 13% after the semiconductor manufacturing company gave a first-quarter forecast that is weaker than expected.
• Cadence Design Systems (CDNS) climbs 6% after the electronic design automation software company reported fourth-quarter results that beat expectations and gave an outlook that is seen as positive.
• Caesars Entertainment (CZR) rises 5% after the casino operator reported same store adj. Ebitda for the fourth quarter that beat the average analyst estimate.
• Global-e Online (GLBE) rises 18% after the application software company reported fourth-quarter results that beat expectations and gave a positive forecast.
• Mister Car Wash (MCW) climbs 17% after agreeing to be taken private by Leonard Green & Partners at $7 per share in cash.
• New York Times Co. (NYT) rises 3% after Berkshire Hathaway built a stake in the publisher.
• Palo Alto Networks (PANW) tumbles 7% after the security software company gave a forecast for adjusted earnings that was weaker than expected for both the third quarter and the full year.
• Pitney Bowes Inc. (PBI) climbs 7% after the shipping and mailing software firm posted fourth-quarter earnings that topped expectations and management provided a strong 2026 profit forecast.
• Rush Street (RSI) rises 18% after the gaming company reported revenue for the fourth quarter that beat the average analyst estimate.
• Sandisk (SNDK) falls over 3% as Western Digital is selling a stake in the the flash-memory unit that it spun off.
• SimilarWeb (SMWB) falls 23% after the web services company’s fourth-quarter results missed expectations and it gave an outlook that analysts described as disappointing.
• Vita Coco (COCO) rises 6% after the beverage firm provided a strong forecast for 2026 net sales.

After months of gains fueled by optimism over AI, equity markets have turned cautious amid a clash between disruption fears and doubts that heavy spending will yield meaningful returns. The setbacks in US stocks have prompted investors to look elsewhere, with European and Asian benchmarks far outpacing the S&P 500 this year.

“It’s hard to know where the floor on valuation is going to be,” Sophie Huynh, portfolio manager at BNP Paribas Asset Management, told Bloomberg TV. “So I think there’s going to be some temptation to buy on dips.”

Apple has decoupled from the Nasdaq amid the recent AI angst: It’s seen as a safer bet because it isn’t participating in the capex bonanza and doesn’t have a major business line that’s threatened by AI. Rotation is also cropping up among regions — with renewed interest in European equities — and in the latest batch of 13F filings. Berkshire Hathaway slashed its stake in Amazon by more than 75% in the fourth quarter, while also building a stake in the New York Times, in Warren Buffett’s last new bet as chief executive officer of the conglomerate.

Rotation is also cropping up among regions — with renewed interest in European equities — and in the latest batch of 13F filings. Berkshire Hathaway slashed its stake in Amazon by more than 75% in the fourth quarter, while also building a stake in the New York Times, in Warren Buffett’s last new bet as chief executive officer of the conglomerate.

Digging into earnings estimates suggests that AI’s impact on corporate growth is seen as limited outside of Big Tech. Earnings growth estimates for the Mag 7 in 2026 have gone up to 18% from 14% in the aftermath of last year’s tariff-related selloff. For the remaining 493 companies in the S&P 500, expectations have fallen to 11% from 12.5%, according to data compiled by Bloomberg Intelligence. In other AI news, Meta agreed to deploy “millions” of Nvidia processors over the next few years, tightening an already close relationship between the pair. ION Group’s founder said investors are punishing the wrong companies after more than $2 trillion was wiped off the value of software firms in recent weeks. 

Other interesting observations in 13F filings include Third Point increasing its weighting in healthcare while reducing exposure to consumer staples. Pershing Square cut its position in Alphabet and boosted its stake in Amazon, while Meta represented its biggest new buy in the fourth quarter.

In central banks, some Fed officials have begun suggesting that productivity growth from AI could mean higher rates, a view that would put them at odds with the Trump administration. The FT reported that Christine Lagarde plans to leave the ECB before her eight-year term ends in October 2027. An ECB spokesperson said that Lagarde “is totally focused on her mission and has not taken any decision regarding the end of her term.”

Analog Devices, Moody’s and Global Payments are among companies expected to report results before the market opens. Moody’s outlook for 2026 will be in focus following S&P Global’s worse-than-expected profit forecast earlier this month. Earnings from Carvana and Molson Coors follow later in the day.

In Europe, the Stoxx 600 is up 0.9%, rising for a third day and on track for a record close.  Miners lead gains after Glencore reported solid full-year earnings, while chemical stocks lag as a disappointing report from IMCD weighs on the sector. BAE Systems shares jump after the defense firm predicted continued solid sales and earnings growth for the year. Bank and energy also outperform.Here are some of the biggest movers on Wednesday:

• BAE shares gain as much as 6.3% after full-year results analysts called solid and where cash flow stood out.
• Puig shares rise as much as 6.6%, the most since October, as the Spanish company’s full-year revenue beat estimates, with analysts pointing to a strong performance in its main fragrances and fashion business.
• Mediobanca shares rise as much as 9%, the most since last April, after Banca Monte dei Paschi di Siena’s board approved a plan to pursue delisting the investment bank. Paschi shares advance as much as 4.8%.
• Glencore shares rally as much as 3.5% in London after the miner reported adjusted Ebitda for the 2025 full year that beat the average analyst estimate.
• Amrize shares climb as much as 6.1%, with the building materials company hitting the highest on record since its June 2025 IPO, on strong cash returns and positive guidance.
• IMCD shares slump as much as 13%, their biggest drop in almost seven months, after the specialty chemicals maker missed expectations across all metrics.
• Bayer shares slide as much as 7.9%, reversing Tuesday’s gain following the German conglomerate’s class-action settlement plan in relation to the Roundup weedkiller litigation.
• Genmab shares fall as much as 6.9% after the biotech firm forecast full-year revenue which analysts say implies a downside to expectations.
• Carrefour shares drop as much as 5% after delivering full-year results which are seen as slightly weaker than expected.
• EssilorLuxottica shares drop as much as 3.3% to the lowest since July after Bloomberg reported that Apple is accelerating development on new wearable devices, including smart glasses.
• EFG International shares fall as much as 9.4% after an additional legal provision and rising costs “spoilt” the bank’s results by causing earnings to miss expectations.

Resurgent optimism about Europe and the benefits of German stimulus is driving investment flows into the region’s equity markets and fueling an outperformance that is expected to last. The positivity is visible in overall positioning, according to the latest Bank of America survey of the region’s fund managers. A net 35% are overweight European equities relative to global markets, up from 9% just three months earlier.  “The AI scare trade is creative destruction in the making, and when one doesn’t know how it will unfold, one diversifies,” said Nicolas Domont, fund manager at Optigestion in Paris. “Investors are particularly interested in companies which have predictable order books and revenues, such as in defense.”

Asian stocks advanced, led by a rebound in Japanese shares, as many markets around the region remain shut for Lunar New Year holidays.
The MSCI Asia Pacific Index rose 0.5%, snapping a three-day losing streak. Mitsubishi UFJ and Tokyo Electron were among the biggest boosts to the index. Equities also gained in India, Australia, New Zealand and Indonesia. The announcement of Japan’s $36BN investment in US projects as part of a trade deal bolstered optimism in Tokyo. Easing trade tensions have helped support shares across the region, along with improving earnings in markets including India. Confirmation of the investment plans by Japan is positive for overall sentiment, said Tomoaki Kawasaki, a senior analyst at Iwaicosmo Securities. “If these investments help boost the US economy, that could also drive up US yields, which is a plus for financials.” Recent volatility fueled by investor concerns over the impact of AI on corporate spending and business survival has been exacerbated by low trading volumes this week. Markets in South Korea, Singapore and Malaysia reopen Thursday, while trading resumes Friday in Hong Kong. 

In FX, the dollar edged higher against most major peers. The euro held its modest loss after the Financial Times reported that Christine Lagarde is expected to leave the European Central Bank before her term as president expires in October 2027. An ECB spokesperson said Lagarde hasn’t yet made a decision regarding the end of her tenure. The kiwi is the weakest of the G-10 currencies, falling 0.7% against the greenback after a dovish hold by the RBNZ. Cable is flat.

In rates, Treasuries dip, pushing US 10-year yields up 1 bp to 4.07%. Gilts outperform after UK inflation dropped to its lowest level since March 2025. UK 10-year borrowing costs fall 1 bp to 4.37%.

The Federal Reserve is due to release the minutes of its January meeting later on Wednesday. Bloomberg Economics expects the notes to show a broad consensus to hold interest rates steady after three cuts. Money markets continue to price in at least two cuts for the rest of the year. Even so, progress on inflation could give the Fed room to ease policy by 100 basis points in 2026, Bloomberg Economics said.

In commodities, brent crude futures rise 1.9% to near $68.70 a barrel, paring Tuesday’s fall. Spot silver rises 3% toward $76/oz.

Today’s US economic data calendar includes December preliminary durable goods orders and housing starts and February New York Fed services gauge (8:30am), January industrial production (9:15am) and December Treasury International Capital flows (4pm). Fed speakers scheduled include Governor Bowman (1pm), and minutes of January FOMC meeting, at which rate cuts were paused, are slated for 2pm release.

Market Snapshot

• S&P 500 mini +0.4%,
• Nasdaq 100 mini +0.5%,
• Russell 2000 mini +0.4%
• Stoxx Europe 600 +0.7%,
• DAX +0.6%,
• CAC 40 +0.4%
• 10-year Treasury yield +1 basis point at 4.07%
• VIX -0.9 points at 19.38
• Bloomberg Dollar Index little changed at 1184.37,
• euro -0.2% at $1.1834
• WTI crude +0.6% at $62.68/barrel

Top Overnight News

• The Trump administration is closer to a major war with Iran than people realise, a military operation would likely be a massive, weeks long campaign that will be a joint US-Israeli attack: Axios
• US-brokered meetings in Geneva between Russia and Ukraine broke up after barely 90 minutes as Ukrainian President Volodymyr Zelenskiy accused Moscow of attempting to prolong the process: BBG
• US envoys juggle two crisis talks, raising questions about prospects for success: RTRS
• Epstein tried to build web of powerful ties across Middle East, documents show: RTRS
• A senior U.S. official on Tuesday revealed what he said were new details of an underground nuclear test blast that China allegedly conducted in June 2020. Assistant Secretary of State Christopher Yeaw said that a remote seismic station in Kazakhstan measured an “explosion” of magnitude 2.75 located 450 miles (720 km) away at the Lop Nor test grounds in western China on June 22, 2020: RTRS
• ECB President Christine Lagarde is expected to step down from her role before her term ends in October 2027. Lagarde wants to leave before the French presidential election in April next year, which would allow French President Emmanuel Macron and German Chancellor Friedrich Merz to find her replacement together: FT
• ECB’s Cipollone has no indication President Lagarde plans early resignation: RTRS
• UK inflation dropped to its lowest level since March 2025, with consumer prices rising 3% in January from a year earlier.  The latest figures keep the Bank of England on track for a spring rate cut, with money markets pricing two quarter-point reductions this year: BBG.
• ‘Woke’ AI Feud Escalates Between Pentagon and Anthropic: WSJ
• Microsoft said it is on pace to invest $50 billion by the end of the decade to help expand AI to countries across the ‘Global South’: RTRS
• Sanae Takaichi was formally reappointed as Japan’s Prime Minister following her electoral win, allowing her to focus on budget deliberations and a trade deal with US President Donald Trump. Takaichi announced the first batch of projects as part of Japan’s $550 billion investment commitment under the trade deal, including a natural gas facility and a synthetic industrial diamond manufacturing facility: BBG
• Uber to invest over $100 million in autonomous vehicle charging amid robotaxi push: RTRS
• Land Grab for Data Centers Is One More Obstacle to Much-Needed Housing: WSJ
• UK inflation hits lowest in nearly a year at 3.0%, strengthening bets on a BoE rate cut: RTRS
• Nine Skiers Missing After Northern California Avalanche: WSJ
• Americans believe Epstein files show the powerful get a pass, Reuters/Ipsos poll finds
• Fed minutes could highlight shift in balance of risks as policymakers put rates on hold: RTRS

Trade/Tariffs

• Japanese PM Takeichi confirms to have agreed with the US on the first set of investment projects

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded higher in continued thin conditions as many regional bourses remained closed for holidays. ASX 200 mildly gained amid outperformance in real estate, tech and financials, with the latter helped by gains in Big 4 bank NAB post-earnings, although miners,  materials and resources were at the other end of the spectrum after the prior day’s commodities-related pressure. Nikkei 225 rallied back above the 57,000 level with sentiment in Japan underpinned by the better-than-expected trade data for January, which showed the fastest pace of increase in exports in more than three years.

Top Asian News

• Japanese PM Takaichi affirms will consider revision of constitution and wants to pass budget and tax reform bill quickly, adds to consider revision of imperial household law.
• Japan’s Finance Minister Katayama said will carry out responsible fiscal policy, while keeping in mind the IMF’s preliminary policy recommendation.
• IMF said if volatility hits market liquidity, the BoJ should be ready for targeted interventions, such as emergency bond buying, and that Japan should avoid cutting consumption tax as it would weaken fiscal space and raise fiscal risks.

European bourses (STOXX 600 +0.7%) are trading entirely in the green, with the IBEX (+1.1%) leading gains, closely followed by the FTSE MIB (+0.9%) and the FTSE 100 (+0.7%). European sectors are broadly in the green, with Basic Resources (+1.9%) and Banks (+1.5%) leading the way while Chemicals (-1.1%) lags. A rebound in metals prices and positive Glencore (+3.3%) earnings are helping lift the Basic Resources sector, while the Board of Monte dei Paschi approved a plan to fully integrate Mediobanca and delist the bank while preserving the brand.

Top European News

• UK Chancellor Reeves reiterates that the UK will take defense spend past 2.6% in future budgets.

FX

• G10s are mostly lower across the board; GBP remains afloat following above-expected Core and Services metrics, whilst the NZD is the clear laggard in the aftermath of the RBNZ’s decision to keep rates steady (as expected), but held a dovish skew.
• DXY is mildly firmer this morning, and currently trades at the upper end of a 97.11-97.32 range, holding just above its 21 DMA at 92.20. Further upside could see a test of the prior day’s high at 97.54. Really not much driving things for the index this morning, but could face some volatility on a) geopols, b) US data, c) FOMC Minutes.
• GBP remains resilient vs the USD strength this morning, following the region’s inflation report, with particular focus on the hotter-than-expected Services and Core metrics. In more detail, the headline printed in line with the market consensus at 3.0% Y/Y, and as such, slightly hotter than the BoE’s 2.9% forecast for the period. The headline was also accompanied by a hotter-than-expected core and services figure. M/M metrics were broadly as expected, unwinding the December base effects. Taking a look at food inflation, it fell to 3.6% (prev. 4.5%); ING suggests that hawks can become “a little more relaxed about the upside risks to inflation”. ING sticks with its call for a March cut and then another by June. Market pricing shifted a little dovishly, with the probability of a March cut now seen at 95% vs 84% pre-release. Cable initially knee-jerked lower, and then immediately reversed that move to print a session peak at 1.3577; the upside then gradually petered out, to now trade within a 1.3549-1.3577 range.
• NZD is the clear underperformer this morning, following the RBNZ’s decision to keep rates steady (as expected), though the accompanying commentary held a dovish skew. In brief, the Bank stated that the committee will continue to assess incoming data carefully and if the economy evolves as expected, monetary policy is likely to remain accommodative for some time. Furthermore, it stated that inflation is most likely returning to within the committee’s 1–3% target band in the current quarter and that, conditional on the central economic outlook, the OCR is projected to remain around its current level in the near term before increasing from late 2026. NZD/USD currently trades around the 0.60 mark (coincides with its 21 DMA), within a 0.5989-0.6053 range.

Central Banks

• RBNZ keeps the OCR at 2.25%, as expected, while it stated that the committee will continue to assess incoming data carefully. If the economy evolves as expected, monetary policy is likely to remain accommodative for some time. Committee is confident that inflation will fall to the 2% midpoint over the next 12 months due to spare capacity in the economy, modest wage growth, and core inflation within the target band. Inflation is most likely returning to within the committee’s 1–3% target band in the current quarter.
• RBNZ Governor Breman said OCR trajectory is aligned with the anticipated evolution of the economy, adds OCR track indicates there is a possibility of a hike towards the end of the year but noted Q4 hike is not fully priced in to the OCR track.
• RBNZ Governor Breman said forward path reflects stronger economic outlook.
• Fed’s Daly (2027 voter) said models show productivity gains are lifting the neutral rates, labour market shows less churn and dynamism, adds impact on neutral rate is unlikely in the near term and growth is solid, but firms cite uncertain demand.
• ECB’s Villeroy said the ECB has won the battle against inflation, domestic French inflation is undershooting on temporary factors but it is not too low.
• ECB President Lagarde is expected to leave the ECB, before her eight-year term ends in October 2027, according to FT citing a person familiar with her thinking. However, ECB said that Lagarde remains committed to her role and has not made a decision on her departure.

Fixed Income

• A bearish start for fixed income, though only modestly with USTs lower by a handful of ticks in a narrow 112-30+ to 113-05+ band. US specifics thus far are a little light as we continue to digest the better-than-expected data on Tuesday and Fed speak that was a little hawkish from voter Barr, weighing on the complex. More insight will be derived from the FOMC Minutes this evening, which follows a 20yr auction and Fed’s Bowman.
• The main focus point this morning is Gilts, though the benchmark is little changed as things stand. Opened lower by 17 ticks and then fell one more to a 92.03 trough in reaction to the morning’s CPI data, while the headline Y/Y was in-line with market consensus, it was hotter than the BoE’s view; additionally, core and services figures came in hotter than the market forecast. However, the net takeaway from the release is that it doesn’t definitely solve the March vs April debate, with the decision in March looking like another 5-4 with Bailey to tie-break.
• Bunds are little moved in a 129.15-39 band, no move to the morning’s Final French CPI series. The main point of focus for the EZ is reporting in the FT, among others, that ECB President Lagarde could step down before her term ends in October 2027. The FT outlines, citing sources, that this would ensure both French President Macron and German Chancellor Merz are in power and have a significant say in appointing a successor. No move to a tepid 2036 Bund auction.
• Germany sells EUR 4.238bln vs exp. EUR 5.5bln 2.90% 2036 Bund: b/c 1.46x (prev. 1.65x), average yield 2.73% (prev. 2.85%), retention 22.9% (prev. 23.3%).
• Kenya reportedly intends to issue additional USD denominated noted, potentially in multiple series, Bloomberg reported.
• Australia sold AUD 1.2bln 4.25% October 2035 bonds, b/c 3.90, avg. yield 4.7439%.

Commodity

• Crude prices are nursing prior day losses following yesterday’s geopolitical development between the US and Iran, which ended on a more positive note, though caution remains. Thus far, officials suggest that talks were substantive and some issues were clarified, but highlighted that talks were difficult. Thereafter, the crude complex notched session highs following an Axios report, which suggested that the Trump administration is closer to a major war with Iran than people realise. Brent Apr’26 moved higher from USD 67.74/bbl to a high of USD 68.08/bbl over six minutes.
• In the metal space, spot gold and silver made gradual strides higher during the APAC session. XAU trades above the USD 4,900/oz within a USD 4869.95-4961.4/oz range, whilst XAG trades just above USD 75/oz within the 72.2305-57.783 range. Newsflow has been light for precious metals thus far in the European session.
• Copper prices are also rebounding, nursing prior day losses and in tandem with the improving risk tone. 3LME copper trades in the upper end range of USD 12.649-12.731.2k/t. Reminder that China, the largest market for copper, remains closed due to the Chinese new year’s.
• Hungary seeks EU approval to import Russian seaborne crude, says the Hungarian Minister of Foreign Affairs and Trade.
• Slovakia has declared an oil emergency and will release oil from its state reserves.
• US Energy Secretary Wright said they are looking to end Iran’s progress towards nuclear weapons and want IEA nations to focus on energy security.
• Study shows that US has enough raw copper to meet domestic demand and can meet 146% of annual demand using raw copper from overseas and domestic mines and from scrap, while China 40% of its demand, according to Benchmark Mineral Intelligence cited by FT.

Geopolitics: Ukraine

• Ukraine’s President Zelensky tells reporters that they’ve agreed to continue peace discussions, adds that talks were difficult and positions are different for now.
• Head of Ukrainian delegation says negotiations were substantive and there was progress; a number of issues were clarified.
• Update of new round of Ukraine talks is that there’s been no concrete date set, IFX reported.
• The top Russian negotiator said the talks were difficult but business-like, RIA reported.
• Ukraine talks in Geneva have ended, new round of talks will be held soon, RIA reported.
• US Special Envoy Witkoff said US facilitated the third trilateral meeting between Ukraine and Russia, adds Ukraine and Russia agreed to update leaders and pursue an agreement.

Geopolitics: Middle East

• The Trump administration is closer to a major war with Iran than people realise, Axios reports citing sources; a military operation would likely be a massive, weeks long campaign that will be a joint US-Israeli attack.
• US Energy Secretary Wright said they are looking to end Iran’s progress towards nuclear weapons and want IEA nations to focus on energy security.
• Iran and Russia are reportedly said to conduct navy drills in the Sea of Oman and Northern Indian Ocean on February 19th.

Geopolitics: Other

• US Secretary of State Rubio has been holding secret talks with the grandson of Cuba’s Castro, Axios reported citing sources.
• US State Department senior official said the US would resume nuclear tests to match ‘opaque’ Chinese activity and flagged new details about a 2020 test the US recently accused China of secretly conducting, according to SCMP.

US Event Calendar

• 7:00 am: United States Feb 13 MBA Mortgage Applications, prior -0.3%
• 8:30 am: United States Dec P Durable Goods Orders, est. -2%, prior 5.3%
• 8:30 am: United States Dec P Durables Ex Transportation, est. 0.3%, prior 0.4%
• 8:30 am: United States Dec Housing Starts, est. 1303.5k
• 8:30 am: United States Dec P Building Permits, est. 1400k
• 9:15 am: United States Jan Industrial Production MoM, est. 0.4%, prior 0.4%
• 9:15 am: United States Jan Capacity Utilization, est. 76.5%, prior 76.3%
• 1:00 pm: United States Fed’s Bowman Speaks in Washington
• 2:00 pm: United States FOMC Meeting Minutes
• 4:00 pm: United States Dec Total Net TIC Flows, prior 212.04b
• 4:00 pm: United States Dec Net Long-term TIC Flows, prior 220.24b

DB’s Jim Reid concludes the overnight wrap

As US markets returned from the holiday, volatility re-emerged across AI linked equities, with the VIX at one point nudging up towards YTD highs (just shy of 23). Around that time, the S&P 500 and the Magnificent 7 were down roughly -0.9% and -1.5% respectively, marking their intraday lows within an hour of the European close. However, both indices then staged a sharp rebound, closing +0.10% and +0.23% higher on the day.

The NASDAQ (+0.14%) and the Russell 2000 (-0.00%) were also little changed, but with sizeable dispersion underneath the headline stability. For instance, while the Philadelphia Semiconductor Index (-0.02%) recovered from being down more than -2.5% intraday, the software & services (-1.59%) segment still led the declines within the S&P 500. And some defensive sectors also struggled, with consumer staples down -1.51% as Walmart fell -3.76% from what had been a 20% gain YTD. Volatility was also evident across other high profile 2026 themes, with Brent crude (-1.79%), gold (-2.29%) and Bitcoin (-1.72%) all ending weaker, in part thanks to cautiously upbeat comments out of US-Iran talks.

In Europe, early signs of AI related concerns weighed on several indices, although sentiment improved into the close. The STOXX 600 finished +0.45%, with real estate, healthcare and banks outperforming, while the CAC 40 (+0.54%), FTSE 100 (+0.79%) and DAX (+0.80%) all outperformed.

Markets also digested a range of second tier US data. The Empire Manufacturing Index came in slightly better than expected at +7.1 (vs +6.2 consensus), while the NY Fed February employment index rose to +4.0 from -9.0 previously. Weekly ADP data showed 10,250 jobs added over the four weeks ending January 31, so consistent with slightly over 40k monthly job growth. Less positively, the NAHB Housing Market Index saw a slight decline in February to its lowest in six months (36 vs 38 expected).

Alongside the data, we received some patient-sounding Fed commentary. Fed President Goolsbee reiterated that further evidence of inflation moving back towards 2% would be required before easing, while Fed Governor Barr said that “it will likely be appropriate to hold rates steady for some time”. Markets slightly dialed down expectations for rate cuts, with 60bps of 2026 easing priced by yesterday’s close (-2.3bps on the day). In turn, 2yr Treasury yields edged higher (+2.7bps), while 10yr (+1.1bps) and 30yr (-0.6bps) saw muted moves, resulting in some curve flattening.

By contrast, government bonds rallied across Europe, with 10yr bund yields falling -1.6bps, OATs -2.8bps and BTPs -1.7bps. The main trigger for that was the February ZEW survey, which saw expectations unexpectedly decline (58.2 vs 59.6 prev. and 65.2 exp.). While the ZEW is often noisy, it does have some leading properties and the print will add attention to the upcoming PMI data on Friday and the Ifo survey on Monday.

Here in the UK, 10yr gilts (-2.4bps) also rallied following weaker labour market data, notably showing youth unemployment reaching its highest cyclical level since 2015 at 16.1%. Payrolled employees declined for a fifth consecutive month, with the January flash estimate pointing to an -11k fall, while the unemployment rate edged up to 5.2% (vs 5.1% expected). Overall, the data did little to ease concerns over the softness of the UK labour market and markets dialed up expectations for near-term BoE easing, with pricing of a March rate cut rising from 74% to 79%. As a reminder, our UK economist continues to expect two further rate cuts this year, likely by summer.

We also saw some dovish repricing in Canada, where CPI printed slightly below expectations, with headline inflation at +2.3% y/y (vs +2.4%) and trimmed core at +2.4% y/y (vs +2.6%). With inflation concerns continuing to ease, Canadian 2yr yields fell -2.3bps to a 10-week low of 2.45%.

Turning to geopolitics, oil prices initially extended recent gains amid reports that Iran had temporarily closed parts of the Strait of Hormuz during military drills, but prices then reversed course as it emerged that the latest US-Iran talks appeared constructive. Iran said it reached a “general agreement on a set of guiding principles” for a potential nuclear deal, with Bloomberg reporting later on that Iranian negotiators are due to return in two weeks’ time with a new proposal to address gaps that remain versus US demands. By the close, Brent crude declined by -1.79% to $67.42/bbl. The more encouraging geopolitical backdrop also weighed on gold (-2.29%) and silver (-4.03%), which extended declines that had emerged during yesterday’s Asia hours amid the Lunar New Year holiday.

Asian equity markets are higher this morning but with still low volumes due to the closure of markets in mainland China, South Korea, and Hong Kong. As I check my screens, Japanese stocks are recovering from losses incurred earlier this week, with the Nikkei and Topix indices both trading around +1.25% higher respectively. Elsewhere, the S&P/ASX 200 (+0.52%) is higher for the third session, while the S&P/NZD 50 (+1.54%) is up after three sessions of losses, following a less hawkish hold than expected from the RBNZ. The kiwi has declined by -0.81% to 0.60 against the dollar, while the yield on the 2-year policy-sensitive government bonds is down -9.8bps to 3.096%, the lowest level since mid-January.

Elsewhere in Asia time, S&P 500 (+0.20%) and NASDAQ 100 (+0.27%) futures are both higher with US Treasury yields up around a basis point across the curve. As we go to print the FT is reporting that ECB President Lagarde is looking to step down before her 8-year term ends in October next year, targeting a move before the French elections in April 2027, thus allowing her successor’s appointment to be made by the current set of politicians. As I press send on this the ECB has said that Lagarde has not made any decision on the end of her term. So a live story to watch.

Looking ahead, upcoming data include US January industrial production, capacity utilisation, the leading index and December durable goods orders. Elsewhere, UK January CPI, RPI and PPI data are due, alongside Canada’s January existing home sales. Central bank events include the release of the FOMC meeting minutes and speeches from ECB members Villeroy and Schnabel. Notable earnings include Analog Devices and Booking, while the US Treasury will auction $16bn of 20 year bonds.

Authored by Rob Sabo via The Epoch Times,

The Internal Revenue Service is taking longer to process tax refunds than it did a year ago, but the average size of refund checks that have already been issued to taxpayers is up by nearly 11 percent from those received through the same period in 2025.

Early individual taxpayer refunds are moving sluggishly because of the PATH Act, which required the IRS to hold tax returns from filers who claimed the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) until Feb. 15, the federal tax agency said in a statement on Feb. 13.

Through Feb. 7, the IRS had received 22,351,000 tax returns, a 5.2 percent decline from 2025, when it had received 23,589,000. However, the IRS noted, that number does not include refunds that it has already received but were held back due to the PATH Act provisions.

“It’s important to note this week’s refund numbers do not include millions of EITC and ACTC refunds to these taxpayers,” the IRS stated.

Millions of taxpayers are expected to see an increase in their refunds in the 2026 tax season due to the One Big Beautiful Bill Act, which brought widespread changes in the tax code. Chief among the major provisions expected to benefit taxpayers is an increase to the standard deduction to $16,100 for individual filers and $32,200 for married couples who file a joint return.

In addition, a new exemption of up to $12,500 ($25,000 if married and filing jointly) for qualified overtime pay, along with a deduction of up to $25,000 for income derived from tips, and a new $6,000 deduction for seniors ages 65 and older, could lead to significantly higher tax returns.

Andrew Lautz, director of tax policy for the Bipartisan Policy Center, said in late January that the new provisions could complicate individual returns because companies may not have updated their reporting systems to help employees clearly understand and claim the new deductions.

“In contrast, many changes in [the One Big Beautiful Bill] are relatively straightforward: The larger standard deduction is simple, and will be claimed by tens of millions of taxpayers,” Lautz said.

“The larger [Child Tax Credit] will also benefit tens of millions of families, although new restrictions on some families may complicate tax filing and credit claiming. The new deduction for seniors will cut taxes for millions and is easily verified by the taxpayer’s age.”

The IRS said it has already issued more than 7.4 million refund payments, with the average refund payment totaling $2,990—a $925 increase from the average refund payment for the same time frame a year earlier.

Electronic filings by certified tax professionals of 7.86 million are down by 9.6 percent from 2025. The IRS said it has seen a 35.2 percent spike in visits to its website, with nearly 127 million visits versus nearly 94 million visits in the same period last year.

However, the agency said numbers tend to come in line with previous years as the tax season progresses.

“Large percentage changes in filing season numbers are usually seen at the beginning of each tax season. Historically, these numbers even out in future weeks as more tax returns come in,” the IRS stated.

The IRS will publish updated tax refund statistics on Feb. 27 for returns processed through Feb. 20 that will include returns from taxpayers who claimed the EITC and ACTC.