As Warren Buffett popularized: “Price is what you pay, value is what you get”.

As Visual Capitalist’s Jeff Desjardins details below, just because someone pays the most, doesn’t mean that they extract the biggest payoff from a product or service.

Today’s visual from Our World in Data that compares life expectancy with healthcare spending per capita hints at exactly this paradox.

The Data on Life Expectancy vs. Healthcare Spending

Below is the data for 51 countries for the year 2023:

The clear takeaway is that while most high and upper-middle income countries cluster around the same trajectory, the United States is a clear outlier.

On average, the countries on the above list have a life expectancy of 79.74 years for a cost of $3,986 per person, while the U.S. has a life expectancy of 79.3 and spend of $12,023 per person.

Peer countries (Canada, UK, Germany, Japan, France, Italy) spend about half of what the U.S. does on healthcare per capita on average, but all have better life expectancy outcomes.

Why is the U.S. an Outlier?

While the U.S. excels in advanced and specialized medical care, life expectancy outcomes are held back by lifestyle and social factors rather than clinical capability.

Higher rates of obesity, chronic disease, opioid overdoses, gun violence, and traffic fatalities all weigh on average lifespan.

At the same time, healthcare access is uneven, with large gaps by income, race, and geography. As a result, additional spending often goes toward higher prices and end-of-life care, producing diminishing returns in overall life expectancy.

View the highest and lowest life expectancy rates around the world in this map.

It’s only fitting that two days after we got the weakest US Manufacturing ISM print in over a year, earlier this morning we got a diametrically opposite report from the Service sector, which according to the Institute for Supply Management expanded in December at the fastest pace in more than a year, fueled by solid demand growth and a pickup in hiring. As the chart below shows, while the Service sector grew at the fastest pace since October 2024, the Manufacturing sector contracted at the fastest pace since November 2024.

The Institute for Supply Management’s index of services rose 1.8 points to 54.4, the highest since October 2024 (recall readings above 50 indicate expansion in the largest part of the economy). The December figure exceeded all projections in a Bloomberg survey of economists. Ironically, it printed at the exact same time as the latest JOLTs report which as we noted earlier, printed below all Wall Street estimates.  

New orders expanded by the most since September 2024 and a measure of business activity, which parallels the ISM’s factory output gauge, climbed to a one-year high. Export bookings grew at the fastest pace in more than a year. Meanwhile, ISM’s index of prices paid for services and materials showed the slowest growth in nine months. The supplier deliveries index fell 2.3 points from the highest level in a year.

Authored by Rob Smith via RealClearMarkets.com,

Now that Epiphany has begun and Christmas is over, perhaps it’s time to stop being so excessively nice to “groups” that do the most damage to an orderly and civilized world. The greater good requires us to hurt some feelings.  Remember in Star Trek when the Klingons attacked the USS Enterprise and Captain Kirk raised a force field so enemy weapons couldn’t penetrate the ship? That is precisely what the clever jackals on the Left have done to public discourse.

A generation ago, importing 100,000 Somalis into Minneapolis would have been rejected outright, because Westerners were still permitted to speak plainly about Somalis, their culture, and Islam. Today, that conversation is impossible. The Left has erected a rhetorical force field to shield its political interests from its most dangerous enemy: the truth.

No societal problem can be solved unless the remedy addresses reality. Speak a truth—no matter how calmly or sincerely—and you are instantly branded a racist, homophobe, white supremacist, misogynist, fatphobe, xenophobe, and bigot. Yet by every objective metric, certain groups of people simply aren’t very smart—100% demonstrable through IQ data, test scores, and long histories of non-achievement. Men and women are biologically, emotionally, and cognitively different. But the force field forbids me from saying that liberal white women are clinically insane due to biological brain differences, or that saving the Republic may require repealing the 19th Amendment. Oops—I said it. Instead of screeching “misogyny” and shutting down speech, how about a debate? Prove me wrong. In New York, ninety percent of them voted for Mamdani!

Spare me the Indian land acknowledgements and the performative inability to acknowledge who actually founded this country. By modern standards, every living American is a white supremacist. The Western world created virtually everything of value. Anyone here not living in a grass hut, speaking a language without an alphabet, and eating grasshoppers has voluntarily assimilated into Western European culture because they recognize it as—yes—supreme.

So can we finally discard “intersectionality,” that pathetic framework where every group that sucks demands handouts while blaming the groups that don’t suck for their failures? The only way to help groups that suck is to tell them they suck—and that improvement requires emulating those who don’t. What, exactly, is wrong with being xenophobic when the culture in question is a rotten, thieving, low-IQ Islamic culture that has been terrorizing the West for 1,400 years?

The wizards atop Leftist orthodoxy make the rules for everyone else—rules designed to insulate themselves from criticism and preserve political hegemony. If you tell dysfunctional groups the truth and then leave them alone, they tend to improve. Anyone who has spent time among the liberal elite knows their public virtue signaling about forbidden language is a sham. In private, they readily admit the truths they forbid others from stating. Somehow, they’ve convinced their hordes of useful idiots to believe what they themselves do not.

Acknowledging objective reality—things that are undeniably true—is not hate speech. We’ve been bullied into silence by the threat of being labeled a hater. And yes, there are plenty of things I hate—crime, waste, stupidity, fraud, dishonesty, Duke University—but I don’t hate people. Thinking liberal white women shouldn’t vote is not hatred. It’s recognition that they lack Aristotelian logic, the cornerstone of sound government and durable civilizations. I’m trying to protect them—from destroying the country and from having their suburban homes confiscated by red-star-wearing commissars, or worse, being sold into sex slavery by neighborhood mullahs. Calling insanity what it is an act of love.

Every day on social media we see videos of inner-city youths bum-rushing retail stores and looting with impunity. Total mayhem. Yet the force field prevents criticism—let alone identification of the culprits. Something is profoundly wrong with this culture, and the only cure is ruthless denunciation and an end to enabling dystopia. That, too, is love.

As one of the world’s great wordsmiths, I resent being told what words I may or may not use. Imagine if, during World War II, the Japanese informed MacArthur and Admiral Nimitz that they couldn’t deploy the Marines or aircraft carriers—or else be called a bad name—and our leaders complied. Wars are not won by surrendering your most effective weapons. Sometimes the forbidden word is le mot juste. It says exactly what needs to be said—and with style.

Take the word RETARD. I enjoy it mostly because I’m told I can’t say it. I use it sparingly, but with precision.  

Donald Trump used it to describe Tim Walz.

He didn’t apply it cruelly to a child with Down syndrome, yet the MSM and the Left lost their minds. Heads exploded. It was glorious.

The Somali community managed to pull off a $9 billion scam right under Tim Walz’s nose.

“Tampon Tim” claims ignorance. If that’s true, there is no more accurate word in the English language than retard.

Speech codes lead to national self-destruction. Truth—especially when delivered in sharp, colorful tones—is the best weapon in the war of woke insanity.

Nvidia CEO Jensen Huang emphasized in his Monday CES keynote that memory will be a major value driver across the AI universe, a view that aligns with our observation in 2H25 that data-center buildouts are aggressively absorbing DRAM and HBM capacity. With supply already tight and pricing soaring, this environment is translating into earnings tailwinds for memory producers, prompting UBS to say last week that the current memory upcycle could “turbo-charge” Samsung Electronics’ profits.

“For storage, that is a completely unserved market today,” Huang told the audience at CES on Monday. “This is a market that never existed, and this market will likely be the largest storage market in the world, basically holding the working memory of the world’s AIs.”

Chipmakers led gains on Tuesday after Huang highlighted storage as an “unserved market,” with SanDisk soaring as much as 28%. Storage companies Western Digital and Seagate Technology also posted double-digit percentage gains.

Mizuho trading-desk analyst Jordan Klein told MarketWatch that Huang’s comments are “bullish” for memory companies. He noted that Huang discussed “how important memory will be for AI use cases and inferencing, such as long reasoning and [key-value] cache to recall all user inquiries with agentic AI.”

SanDisk and other memory and storage companies are “key beneficiaries” of the push for “AI inferencing and AI at the edge” in 2026, Bank of America analysts led by Wamsi Mohan told clients recently.

Chatbots: soaking up all the world’s power, water and memory pic.twitter.com/L2mcdcLSko

— zerohedge (@zerohedge) October 24, 2025

Mohan expects tech firms to retain large amounts of data for training, analytics, and compliance purposes, with demand for storage “skyrocketing in tandem.” In particular, he noted the growing demand for EVs, drones, surveillance, and sports technology.

Also, last week, UBS analyst Nicolas Gaudois highlighted to clients the uptick in memory is expected to “turbo-charge earnings” for Samsung’s memory business. The report is available in full here.

The latest DDR5 DRAM pricing on Amazon!

Last month, Goldman analyst Maho Kamiya told clients that mounting concerns about soaring memory prices pose new risks for Nintendo, which manufactures consumer electronics such as the popular Switch 2.

The great memory crunch has arrived.

Update (Wednesday):

Following President Trump’s overnight Truth Social post that Venezuela would transfer “30 to 50 million barrels of high-quality, sanctioned oil” to the U.S., Energy Secretary Chris Wright outlined next steps for both the oil and the sales proceeds during remarks at a Goldman Sachs conference.

Earlier, Wright was featured at the Goldman Energy, Clean Tech & Utilities Conference in Miami. He told the audience, including executives from Chevron, ConocoPhillips, and other major oil and gas majors, about the Trump administration’s plans for Venezuela’s oil sector following last weekend’s regime change led by America’s Delta Force operators (implying the toppling of Nicolás Maduro).

Wright opened the discussion by describing the “horrific” two-decade decline of Venezuela under the Maduro socialist regime. He said the country was once “one of the shining stars” of South America but, under socialist rule, descended into a hellhole of narcoterrorism.

“We want to change the game in Venezuela, fix the country so it’s a productive member of the Western Hemisphere. So it’s an ally of the United States and a major oil supplier to the world. But the old ways weren’t working. This started with an oil blockade. They [Maduro’s socialist regime] get money two ways: selling oil and selling drugs,” Wright explained.

He continued, “We ultimately want to be cut off completely from drugs and grow the selling of oil. But in the short term, there was a blockade – a major cash flow source – that pinched the heads of Venezuela to get them out of power.”

Wright went on to describe Venezuela’s oil market in a post-Maduro world: “Now we have a different arrangement. Instead of the oil being blockaded, as it is right now, we’re going to let the oil flow. Sell that oil to U.S. refineries and to markets around the world to improve global oil supplies. But those sales will be conducted by the U.S. government, with the proceeds deposited into accounts controlled by the U.S. government. From there, the funds can flow back into Venezuela to benefit the Venezuelan people.”

“We need to use the leverage from those oil sales to drive the change that simply must happen in Venezuela, so it is no longer a drug threat, a kidnapping threat, a gun-running threat, or an enabler of our adversaries in the hemisphere. Venezuela has been a train wreck for the U.S. and the American people, and under Trump’s leadership, we are committed to changing and restoring it in a way that benefits not only Americans, but Venezuelans as well,” he said.

On the subject of Venezuelan energy infrastructure, Wright emphasized that it is “not good.” He said, “Decades of underinvestment and corruption have degraded infrastructure, and it’s not just oil and gas; it’s also the power grid.”

Switching gears, Wright called climate change spending probably one of the biggest malinvestments in human history. He said approximately $10 trillion has been invested globally “fighting climate change,” and asked what the return has been: “For $10 trillion, we got solar up to 1.2% of global energy and wind at 1.4%. Collectively, that’s just 2.6% of global energy.”

Wright added that where grid penetration of green energy is high, power prices have skyrocketed, citing Germany, the UK, and California as examples, resulting in deindustrialization.

About halfway through the conversation, Wright discussed the surge in power demand driven by data center buildouts and other electrification trends across the U.S.

“My biggest concern is the electricity grid,” Wright noted. He described climate-crisis policies as a “delusion,” saying the grid went from producing cheaper and cheaper power to now producing increasingly more expensive power.

Wright blasted blue states for their terrible ‘green’ energy policies, saying this has been one of the driving forces behind the power bill crisis.

He said, “Demand growth of the power grid is one way to drive down power prices.” In other words, build more power plants.

On the nuclear power front, Wright said the nuclear power industry was “destroyed” by climate change policies and “regulatory misunderstandings”…

“If we want to reshore manufacturing and win the AI race, we have to add 100 gigawatts of reliable capacity that is there at peak demand,” Wright said near the end of his conversation at the Goldman conference.

Very informative talk from Wright.

We suggest readers listen in full.

* * *  

Update (2035ET): 

Brent crude futures fell after a Truth Social post from President Trump said officials in Venezuela will transfer “30 to 50 MILLION barrels of high-quality, sanctioned oil” to the U.S.

“This oil will be sold at its market price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States,” Trump said.

He added, “I have asked Energy Secretary Chris Wright to execute this plan immediately. The oil will be taken by storage ships and brought directly to unloading docks in the United States.”

In markets, Brent crude fell 2.3% on supply concerns but has since clawed back some of the losses.

An earlier Bloomberg report detailed how Chevron contracted 11 tankers scheduled to arrive later this month at the Venezuelan government-controlled ports of Jose and Bajo Grande.

We’re sure the Strategic Petroleum Reserve could use some of that Venezuelan crude oil…

*    *    * 

Via Middle East Eye

The US ambassador to the United Nations on Monday said that enemies of his country cannot be allowed to control vast oil reserves, such as the ones in Venezuela under President Nicolas Maduro.

Mike Waltz spoke less than two hours before Maduro made his first court appearance, not far from UN headquarters in Manhattan. Maduro is charged with narco-trafficking, among other charges, and has pleaded not guilty. “We’re not going to allow the Western Hemisphere to be used as a base of operation for our nation’s adversaries,” Waltz said. “You cannot continue to have the largest energy reserves in the world under the control of adversaries of the United States, under the control of illegitimate leaders, and not benefiting the people of Venezuela.”

He insisted, however, that despite the US president himself saying that his administration will be “running” Venezuela, the US will not be “occupying” the Latin American nation. “There is no war against Venezuela or its people,” Waltz told the UN Security Council (UNSC). “We are not occupying a country.” 

US President Nicolas Maduro entered a not guilty plea in a federal courthouse in New York City on Monday, following his abduction by the US in the early hours of Saturday morning. 

US attorney general Pam Bondi said Maduro has been charged with “Narco-Terrorism Conspiracy, Cocaine Importation Conspiracy, Possession of Machineguns and Destructive Devices, and Conspiracy to Possess Machineguns and Destructive Devices against the United States”. 

A federal grand jury returned an indictment against him and his wife, Cilia Flores, in 2020, under the first Trump administration. Five other defendants were named in the document, but not Flores. 

Bondi has since shared an unsealed indictment that charges Flores and the couple’s son, who was not abducted with them, with trafficking drugs. Flores is also accused of ordering kidnappings and murders, and accepting bribes.

In the US, an unsealed indictment is effectively the withholding of formal criminal charges until the suspects have appeared in court. On Monday, Flores also appeared in court next to her husband and pleaded not guilty. 

Maduro’s stunning abduction from Venezuela by US forces in the early hours of Saturday has been condemned by allies Russia and China, both of which are among the five permanent and veto-wielding members of the UNSC. 

But the US also has that power, meaning there will likely be no accountability at the UN for its actions. The body’s secretary general, Antonio Guterres, has already said he fears there may have been a violation of international law in abducting a head of state from a sovereign country.

UN member states must “refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state”, the body’s charter says. 

A statement from Guterres on Monday, read by UN political affairs chief Rosemary DiCarlo to the UNSC, said he is “deeply concerned about the possible intensification of instability in [Venezuela], the potential impact on the region, and the precedent it may set for how relations between and among states are conducted”. 

He added that the UN will support all efforts at dialogue between the US and Venezuela. For his part, Venezuela’s ambassador to the UN, Samuel Moncada, said the abduction was “an illegitimate armed attack lacking any legal justification”.

The death count from the US attack on Venezuela has risen to 80, including civilians and members of security forces, according to a senior Venezuelan official who said the number could rise further, The New York Times reported on Monday. 

The Trump admin’s talking points on what was behind the Venezuela intervention have been shifting…

Pete Hegesth, “We spent decades, purchased in American blood and got nothing economically in return”

“Now we can ensure we can access to additional wealth”

In case you had any doubt, it’s all about oil pic.twitter.com/cac90Iid8x

— Farrukh (@implausibleblog) January 5, 2026

US special forces abducted Venezuela’s president from the capital, Caracas, early on Saturday, as American fighter jets bombed key military installations and bases across the country. Venezuela’s acting president, Delcy Rodriguez, said the US seizure of Maduro had “Zionist undertones”. 

Rodriguez, who served as Maduro’s vice president, has been appointed by the Supreme Court to lead the country on an interim basis.

Update (0920ET):

U.S. European Command (EUCOM) confirmed on X that the Department of Justice and the Department of Homeland Security, in coordination with the Department of Defense, seized the Russian-flagged oil tanker Marinera (formerly Bella 1) for violating U.S. sanctions.

“The vessel was seized in the North Atlantic pursuant to a warrant issued by a U.S. federal court after being tracked by the USCGC Munro,” EUCOM said.

The @TheJusticeDept & @DHSgov, in coordination with the @DeptofWar today announced the seizure of
the M/V Bella 1 for violations of U.S. sanctions. The vessel was seized in the North Atlantic pursuant to a warrant issued by a U.S. federal court after being tracked by USCGC Munro. pic.twitter.com/bm5KcCK30X

— U.S. European Command (@US_EUCOM) January 7, 2026

EUCOM continued…

pic.twitter.com/E0hii3A6Zo

— U.S. European Command (@US_EUCOM) January 7, 2026

Read the earlier updates: Russian warships and submarines are nearby.

*   *   * 

Update (0855ET):

NBC News reports that the U.S. Special Forces operation in the North Atlantic to seize a Russian-flagged oil tanker, the Marinera (formerly Bella 1), was successful.

U.S. officials told the outlet that the Marinera “has been secured” following a dramatic, weeks-long chase on the high seas.

The U.S. seized two oil tankers off the coast of Venezuela last month as part of President Trump’s gunboat diplomacy. But why would a U.S. Coast Guard cutter and surveillance planes chase an empty, rusted, Russian-flagged tanker across the Atlantic unless there was potentially something far more valuable on board?

*   *   * 

Update (0814ET):

The Russian outlet RT News has posted footage that appears to show U.S. military forces attempting to board the Russian-flagged tanker Marinera early Wednesday morning in the North Atlantic.

❗️ Military forces, presumably American, are attempting to board Russian-flagged civilian tanker ‘Marinera’ RIGHT NOW — RT source

RT has obtained first exclusive visual confirmation of the boarding attempt https://t.co/lWf62lN7hH pic.twitter.com/rn9xfLmNxi

— RT (@RT_com) January 7, 2026

Reuters reports that the U.S. is “attempting” to seize the Venezuela-linked oil tanker after a two-week chase involving a U.S. Coast Guard vessel and surveillance aircraft.

From like an hour ago or more, as the Americans got into position to attempt boarding.

A massive swarm of RAF jets were patrolling around the north sea, potentially shadowing the Russian Naval fleet on route to escort it. pic.twitter.com/DxxioNbLw6

— Lee Mitchell (@Lee_Mitchell91) January 7, 2026

More color on the operation from the outlet:

The officials, who were speaking on condition of anonymity, said the operation is being carried out by the Coast Guard and the U.S. military.

They added that Russian military vessels, including a submarine, were in the general vicinity when the operation took place.

Marinera made an abrupt heading change as the US MH-6 Little Bird, the 160th SOAR’s smallest helicopter, approached the vessel. 

MARINERA (9230880) just made a sudden southbound turn at 11:26 UTC at 60.9386, -16.37014. Decelerated from 9kn to 8kn speed. pic.twitter.com/dH8BnpF6r5

— TankerTrackers.com, Inc. (@TankerTrackers) January 7, 2026

This is what the “Donroe” doctrine to clean up the Western Hemisphere looks like. However, certainly appears that conflict fears are on the rise … 

*   *   * 

In what can only be described as straight out of a Cold War techno-thriller, The Hunt for Red October vibes, the U.S. Coast Guard is chasing a rusting oil tanker formerly known as Bella 1, now renamed Marinera, flying the Russian flag about 300 miles south of Iceland as it heads toward the North Sea.

On Tuesday, Russian outlet RT News posted an exclusive video on X showing Marinera being chased by a U.S. Coast Guard cutter in the North Atlantic.

BREAKING WORLD EXCLUSIVE: RT obtains FIRST footage of Russian-flagged civilian Marinera tanker being CHASED by US Coast Guard warship in the North Atlantic https://t.co/sNbqJkm5O5 pic.twitter.com/XtbBML3a6j

— RT (@RT_com) January 6, 2026

The Wall Street Journal then reported overnight that Russia is countering the Trump administration’s attempt to seize Marinera by deploying a submarine and other warships to escort the allegedly now-empty tanker.

The chase in the North Atlantic follows last month’s incident near Venezuelan waters, when the tanker – then stateless and flying a false flag – was subject to a U.S. judicial seizure order. As the Coast Guard attempted to board, the crew switched the ship’s registration to Russia, prompting Moscow to demand that the U.S. halt its pursuit.

Trump’s gunboat diplomacy in the Caribbean, along with a broader push for Western Hemisphere defense – what some have called the “Don-roe Doctrine” – has set the tone for the year: U.S. forces intend to control the seas in the Americas, not China and not Russia.

One key question is why Washington is hyper-focused on this particular tanker, given that the global dark fleet numbers more than 1,000 tankers hauling sanctioned crude worldwide. The ship’s quick registration in Russia, without inspection or formalities, may only suggest that the tanker, which departed Venezuelan waters, could be carrying other cargo bound for Russia.

One month after ADP reported a dismal -29K private payrolls print for November, tied for the worst month since March 2023, and just in time to validate the Fed’s latest rate cut, moments ago ADP reported that in December, the US added 41K payrolls, which while a solid jump from last month’s -29K, missed consensus estimates of a +50K print. 

The breakdown showed continued weakness in manufacturing jobs, which shrank by 3K in December, offset by a 44K increase in Service jobs, despite another notable drop in Information (-12K) and Professional/Business services (-29K) jobs. Also notable is that all the weakness was in the Western region (read California) where 61K jobs were lost, while a breakdown of establishments by size saw solid hiring by small and medium companies, offset by a modest 2K increase amid Large companies.

“Small establishments recovered from November job losses with positive end-of-year hiring, even as large employers pulled back,” said ADP chief economist Nela Richardson.

There was more good news for the Trump admin which appears to have halted the sharp deterioration in the labor market: year-over-year pay for job-stayers rose 4.4% in December, unchanged from November while jobchangers saw their pay growth accelerate to 6.6% from 6.3%.

Authored by Janice Hisle via The Epoch Times,

Minnesota will feel an “increasing vise grip of financial penalties” to help make up for taxpayer dollars lost to fraud, Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Service, said Jan. 6.

His agency is auditing all 14 Medicaid programs that Minnesota flagged as vulnerable to fraud; that excludes 73 other Medicaid programs Minnesota runs.

The agency also will “claw back that money” from current Medicaid payments that were to be made to Minnesota, Oz told Fox News.

“This is a major problem for the state, because they’ve got to own the fact that they have been bilking the federal taxpayer [because of] their sloppy behavior for years,” Oz said.

The Epoch Times sent a message to Gov. Tim Walz’s office seeking comment but received no immediate reply.

During a news conference earlier in the day, Walz said he would refuse to step down from the governorship amid the fraud scandals, although he announced Jan. 5 that he was abandoning his reelection bid. His current term in office expires in January 2027.

The governor also criticized President Donald Trump for clamping down on Somalis. Amid increasing concerns over Somalis being accused of defrauding government programs, the president recently halted a deportation protection that had been afforded to Somali refugees for decades and also ramped up federal scrutiny.

A large percentage of Minnesota fraud defendants charged so far are of Somali descent, federal prosecutors have said.

“Somali immigrants who are minding their own business” are facing unfair federal actions, such as Immigration and Customs Enforcement operations, Walz said. More than 2,000 federal agents from the Department of Homeland Security have surged to Minnesota as fraud concerns have swelled.

In addition, the federal government has cut off payments to child care centers in Minnesota and is requiring additional verification of children being served.

Oz said his agency has had difficulty tracking at least $500 million in Medicaid payments to Minnesota. Available data makes it hard to figure out how it was billed and “where it went,” he said.

Officials asked Walz to provide a “corrective action plan” by the end of 2025, but the Walz administration responded late—on New Year’s Eve—with a plan that Oz called “insufficient.” As a result, the federal government is clamping down on Minnesota Medicaid payments, he said.

President Trump doesn’t want taxpayers across the nation footing the bill for Minnesota’s roughly 6 million residents, Oz said.

Officials see signs that government-program fraud or misuse may be higher in California than it is in Minnesota, Oz said, but he gave no figures. California, home to about 39 million people, is six and a half times more populous than Minnesota.

In the North Star State, an attitude known as “‘Minnesota Nice’ made it easy for them to make out like bandits,” Oz said. Minnesota has a longstanding tradition of providing generous social benefits without asking many questions, as The Epoch Times reported previously. That attitude—which may have made the state more susceptible to fraudsters—appears to reflect values of the Scandinavian immigrants who settled in Minnesota.

Beyond the burgeoning fraud scandals, Oz raised an additional concern arising from use of Medicaid. He recently learned that, under federal law, “if you sign someone up for Medicaid, you also give them the right to vote.”

“So, you’re building up a very partisan group of individuals. This is political patronage at the expense of Medicaid,” he said. “The criminal part here is not just a horrible waste and fraud and abuse of our federal … tax dollars, but you’re taking money from our most vulnerable citizens.”

“If you’re lying about the fact that you have Somalian kids pretending to be autistic, that takes services away from kids who truly have autism. … You’re penalizing our most vulnerable,” he said.

That’s why the Trump administration “will not tolerate this,” Oz said.

“We’re aggressively going after this fraud.”

Federal prosecutors have charged dozens of people, mostly Somalis, with defrauding programs intended to feed meals to children, provide children with therapy for autism, and provide affordable housing to the elderly and disabled. Dozens of defendants have already been convicted, and prosecutors expect additional suspects to be charged in those schemes and possibly others. Generally, the fraudsters filled out bogus paperwork, claiming to provide services that were never rendered, prosecutors said, then reaped payments for those services through federal programs.

US equity futures are weaker but off session lows, as markets pause ahead of a series of US labor and economic data. As of 8:00am ET, S&P futures are down 0.1% as global equity markets have run into some resistance after a strong start to 2026; Nasdaq futures dip 0.2% with TMT underperforming premarket, with most Mag7 and Semis names lower while Energy, Healthcare and Staples rallying pre-mkt. Bonds are bid with yields down 2-4bp as the curve flattens; the USD is unchanged. n commodities, Ags are the bright spot as we see some profit-taking in Metals and oil fell after Trump said Venezuela would turn over as many as 50 million barrels of crude to the US with sales proceeds are expected to be split between the two countries. Today’s US economic calendar includes December ADP employment change (8:15am), December ISM services index, November JOLTS job openings and October factors orders (10am). Scheduled Fed speakers include Bowman on banking supervision and regulation at 4:10pm

In premarket trading, Mag 7 stocks are mostly lower (Nvidia +0.6%, Tesla +0.2%, Apple -0.2%, Alphabet -0.3%, Microsoft -0.1%, Amazon -0.2%, Meta Platforms  -0.4%)

• Miners and royalty companies are down as gold and silver pull back with broader markets as traders look to upcoming US economic data later this week.
• AST SpaceMobile Inc. (ASTS) falls 6% after Scotiabank cut the recommendation on the satellite broadband company to sector underperform, saying it faces an “uphill battle” given the leadership position of Elon Musk’s Starlink.
• First Solar Inc. (FSLR) falls 4% after Jefferies cut its recommendation to hold from buy on concerns over tariffs and its valuation.
• Mobileye Global Inc. (MBLY) climbs 10% with the company to acquire Israeli startup Mentee Robotics in a cash-and-stock deal valued at $900 million, as the self-driving car system company expands its robotics capabilities.
• Monte Rosa Therapeutics (GLUE) rises 38% after the biotech announced positive interim data from an ongoing Phase 1 clinical study.
• Strategy (MSTR) climbs 4% after MSCI decided for now to keep digital asset treasury companies in its stock market indexes.
• StoneCo (STNE) falls 5% after after the Brazilian digital payments company said CEO Pedro Zinner will resign for personal reasons effective March 2026.
• Ventyx Biosciences Inc. (VTYX) is up 56% after the Wall Street Journal reported that Eli Lilly & Co. is in advanced talks to acquire the company for more than $1 billion to expand its work in immunology.

In corporate news, MSCI decided against excluding digital-asset treasury companies from its MSCI Global Investable Market Indexes in its February review, sending Strategy higher in extended trading. And an Amazon AI tool offered merchants’ products without their consent.

Stocks have been on a tear on optimism over solid earnings growth and inflation remaining sufficiently contained for the Federal Reserve to keep cutting interest rates. That optimism has persisted despite a worsening geopolitical backdrop, including US actions in Venezuela, its threats of intervention elsewhere and rising tensions between China and Japan. But on Wednesday, the global rally stalled with geopolitical strains dampening the mood. Three big days of data are kicking off, with JOLTS job openings and ADP numbers due later. Memory chip shortages are in focus for AI bulls.

“Shifting trends create uncertainties that need to be priced into assets,” said Florian Ielpo, head of macro and multi-asset at Lombard Odier. “We are talking about a breathing period, with investors taking time to rethink how to deploy their concentrated equity investments in a deconcentrating world.”

Mining stocks were among the biggest decliners in premarket trading, with Newmont Corp., Freeport-McMoRan Inc. and Barrick Mining Corp. all down 1% or more. Precious metals joined the broader pullback, with silver falling below $80 an ounce and gold breaking a three-day winning streak. Copper retreated from an all-time high. 

For AI bulls, memory chips are in focus after comments from Nvidia’s Jensen Huang about the need for memory and storage at CES on Tuesday. Stocks including Sandisk and Western Digital have surged in the past few days, and the rally is likely to continue: Samsung expects shortages to drive price hikes and DRAM specialist Nanya posted 445% year-on-year sales growth for December. 

Three key days of economic data kick off on Wednesday as investors track the Fed’s likely path for rates, with November jobs openings and ADP Research’s private-sector payrolls figures due. The Institute for Supply Management’s index of services is expected to show a slight moderation in December activity. 

“Further declines in the JOLTS hiring and quit rates would add to signs of worsening labor demand,” wrote Elias Haddad, global head of markets strategy at Brown Brothers Harriman. “If so, it would validate the 50 basis points of cuts priced into Fed funds futures over 2026 and weigh on the dollar.”

Ahead of a slate of data in the next few days, a record-sized block trade was placed in the federal funds futures market. The trade was struck in the January contracts for a size of 200,000, the largest ever as confirmed by CME Group. The motive behind the transaction is unclear. It could be related to an unwinding of existing bets or a wager that could benefit from a potential shift in market pricing for the Fed’s next rate decision.

Other developments rattling sentiment include comments from the White House that Trump is considering many ways of acquiring Greenland, and won’t rule out the use of military force. In Asia, China escalated a feud with Japan by announcing a probe on chipmaking material, while rare earth stocks surged on the back of new China-Japan export curbs.

In Europe, the Stoxx 600 is little changed with energy stocks a drag as oil prices slide. Energy stocks lag after President Donald Trump said Venezuela would send oil worth up to $2.8 billion to the US, while utilities outperform. 

Here are some of the biggest movers on Wednesday:

• Italgas shares rise as much as 10% to hit a new record high after gas distribution operator Snam announced an offer of green bonds due 2031 in an aggregate notional amount of €500m, exchangeable for existing ordinary shares of Italgas.
• Thyssenkrupp shares gain as much as 5.3%, leading defense stocks higher after the Trump administration and Ukraine’s allies moved toward an agreement to offer security guarantees long sought by Kyiv.
• ArcelorMittal shares climb as much as 3.5% to the highest level in nearly 14 years after Morgan Stanley installed the stock as top pick in Europe’s steel sector.
• Atlas Copco shares rise as much as 9% to the highest level since February after Bernstein upgrades on expectations that earnings have bottomed.
• InPost shares retreat as much as 8.3%, ceding some of the previous day’s 28% gain triggered by the parcel locker operator’s announcement of a takeover proposal.
• Fresnillo shares drop as much as 4.1%, leading precious metal miners lower as gold prices decline.
• NatWest shares fall as much as 3% after they are downgraded to equal-weight from overweight at Barclays.
• Equinor shares slip as much as 3.8% as European oil stocks track crude prices downwards after Trump said Venezuela would relinquish as much as 50 million barrels of oil to the US.
• Kingspan shares drop as much as 5.4% after the company said it won’t pursue an IPO of Advnsys and will continue to report the data center materials unit as a wholly owned and broadly distinct reporting segment.
• Redcare Pharmacy shares plunge as much as 9.7%, the most since August, after the company posted fourth-quarter sales that came in below expectations due to weakness in over-the-counter products.

Earlier in the session, Asian equities declined, as escalating trade tensions between China and Japan damped investor sentiment following the recent rally. The MSCI Asia Pacific Index dropped as much as 0.7%, poised to snap a four-day advance. Technology megacaps including TSMC and Tencent were among the biggest drags, while Alibaba dropped on fresh concerns over Beijing regulations. A key gauge of Chinese stocks listed in Hong Kong led losses, while benchmarks in Japan and Taiwan also fell. China imposed controls on exports to Japan with potential military uses, intensifying a standoff between Asia’s top economies in a dispute related to Taiwan. Automakers were the biggest contributor to losses in Japan on the news. The Japan-China squabble is causing some jitters after a strong start to the year for the region’s stocks. The rally had also started to show signs of overheating. The 14-day relative strength index for the MSCI Asia Pacific Index climbed above 70 this week, entering technical overbought territory for the first time since early October.

In rates, treasury futures hold gains accumulated during London morning amid bigger rallies in European bond markets spurred in part by weak German retail sales data for November. US yields richer by 1bp-4bp across a flatter yield curve, with 2s10s and 5s30s spreads respectively 3bp and 2bp tighter; 10-year near 4.145% is about 3bp richer by 3bp on the day with bunds and gilts in the sector outperforming by 1.5bp and 4.5bp. European government bonds advance for a third day, with buying more pronounced at the longer end of the curve. German 10-year yields fall 4 bps to a one-month low after weak economic data prompted traders to increase their bets on interest-rate cuts by the European Central Bank. Gilts outperform, with UK 10-year borrowing costs sliding 7 bps. European borrowers brought a record number of tranches to the market on Wednesday and are set to raise at least €38.1 billion ($44.5 billion), a number that’s likely to increase over the course of the day. Issuance in the US investment-grade bond market topped $72 billion in the first two days of the week, according to data compiled by Bloomberg. Focal points of US session include December ADP employment change and ISM services gauge and November JOLTs job openings. 

In commodities, WTI crude futures fall 0.5% to $56.80 a barrel after Washington moved to exert greater control over Venezuela’s industry, with President Donald Trump saying the country would turn over millions of barrels to the US. West Texas Intermediate traded near $57 a barrel. Investors were also keeping tabs on the primary bond market as the first week of 2026 saw a surge in global issuance, signaling strong confidence despite heightened geopolitical risks. Spot silver falls 2% and back below $80/oz. Gold also drops. Bitcoin is down 1.3% near $92,000.

Today’s US economic calendar includes December ADP employment change (8:15am), December ISM services index, November JOLTS job openings and October factors orders (10am). Scheduled Fed speakers include Bowman on banking supervision and regulation at 4:10pm. Albertsons is scheduled to report results before the market open. Earnings from Jefferies and Costco December sales are due later in the day.

Market Snapshot

• S&P 500 mini -0.2%
• Nasdaq 100 mini -0.3%
• Russell 2000 mini little changed
• Stoxx Europe 600 little changed, DAX +0.6%
• CAC 40 -0.2%
• 10-year Treasury yield -3 basis points at 4.14%
• VIX +0.4 points at 15.15
• Bloomberg Dollar Index little changed at 1205.69
• euro little changed at $1.1692
• WTI crude -0.9% at $56.59/barrel

Top Overnight News

• Marco Rubio has told lawmakers that President Trump plans to buy Greenland rather than invade it, while Trump has asked aids to give him an updated plan for acquiring the territory. NYT 
• Trump will meet with oil company chief executives Friday at the White House to discuss plans for them to enter Venezuela and drill. Trump announced that Venezuela would relinquish 30 to 50 million barrels of oil to the US, worth roughly $2.8 billion at the current market price. BBG 
• China’s Foreign Ministry said China’s legitimate rights and interest in Venezuela must be protected, in regards to US President Trump’s statement on Venezuela oil.
• The US for the first time on Tuesday backed a broad coalition of Ukraine’s allies in vowing to provide security guarantees that leaders said would include binding commitments to support the country if Russia attacks again. RTRS 
• Chevron and private equity firm Quantum Capital Group are teaming up on a bid to buy the international assets of sanctioned Russian oil company Lukoil. FT 
• China launched an anti-dumping probe into Japan’s chipmaking material dichlorosilane, deepening trade tensions after Beijing imposed export curbs — potentially affecting over 40% of its shipments to the country. Tokyo called the measures unacceptable. BBG 
• AI “fatigue” is driving cash into shares of S&P 500 companies that aren’t the Magnificent 7, especially those that would benefit most if an expected uptick in economic growth materializes. BBG
• old is neck and neck with Treasuries to become the biggest reserve asset for foreign governments, driven by a year of explosive price gains and aggressive central bank buying. Barron’s 
• Eurozone CPI for Dec was inline on the headline at +2% (down from +2.1% in Nov) while core cooled to +2.3% (vs. the Street +2.4% and down from +2.4% in Nov). BBG 
• Waner Bros. Discovery Board of Directors unanimously recommended shareholders reject amended Paramount tender offer, saying the offer remains ‘Inadequate.’ BBG 
• Goldman forecast MSCI China and CSI300 to appreciate 20% and 12% in 2026, after key benchmarks gained 20%-30% in the past year mainly on multiple expansion. 

Trade/Tariffs

• China’s Commerce Ministry announces an anti-dumping probe into Japan Dichlorosilane imports; investigation begins on Jan 7 and will end a year later, but can be extended by 6 months if needed.
• Japanese Chief Cabinet Secretary Kihara said China curbs targeting only Japan are regrettable, adds we’ll consider necessary response as we assess China’s export curb details.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded somewhat mixed as momentum began to wane despite the fresh record levels on Wall Street. ASX 200 marginally gained amid  strength in tech and defensives, while participants also digested monthly inflation data, which printed softer-than-expected but remained sticky. Nikkei 225 lagged amid Japan’s frictions with China after the latter imposed export controls on dual-use items to Japan. Hang Seng and Shanghai Comp retreated with the Hong Kong benchmark pressured by losses in energy names and tech stocks following a decline in oil prices, and with platform names pressured by China announcing management measures for online platforms. Meanwhile, the mainland bourses kept afloat for most of the session but eventually faltered as the mood deteriorated and were also not helped by a substantial net liquidity drain of around CNY 500bln in the PBoC’s open market operations.

Top Asian News

• Maersk (MAERSKB DC) said Asia-Pacific ocean freight markets enter 2026 with cautious optimism; intra-Asia volumes are gaining momentum, and supply chain planning is increasingly focused on agility, regional connectivity, and early Chinese NY preparations.
• South Korea’s President Lee said had a serious talk with China regarding supply chains and peace on the Korean Peninsula.
• Baidu’s (9888 HK) AI chip arm Kunlunxin aims to raise up to USD 2bln in Hong Kong IPO, according to Bloomberg citing sources. – Co. has picked China International Capital Corp., Citic Securities Co. and Huatai Securities, while China Securities International is also working on the potential offering.
• UMC (2303 TT) Dec (TWD): Revenue 19.3bln (prev. 19.0bln Y/Y).
• China’s market regulator and cyberspace authorities unveiled two separate documents on Wednesday to further regulate the country’s livestreaming e-commerce sector and online trading platforms, Xinhua reported.
• China announces management measures for online platforms and China’s market regulator said online platforms must not sell below cost or disrupt market competition. Online platforms must not sell below cost or disrupt market competition.

European bourses are mixed. The FTSE 100 (-0.6%) is under pressure, hit by losses across underlying commodity prices whilst the DAX 40 (+0.6%) posts gains by around half a percent. European sectors hold a very slight negative bias. Utilities holds towards the top of the pile, joined closely by Construction & Materials, and Real Estate. To the downside, Energy is the laggard, in-fitting with pressure seen across crude benchmarks whilst Luxury downside weighs on Consumer Products & Services.

Top European News

• Italian PM Meloni plans overhaul of Italy’s voting system to aid re-election bid, according to FT.

FX

• DXY is flat intraday but resides in a current 98.497-98.690 parameter as traders await key US labour market data due ahead of Friday’s official employment situation report; ADP’s gauge of nonfarm employment is expected to print 49K in December vs -32K in November. JOLTS job openings are expected to fall to 7.61mln in November (prev. 7.67mln in October); in the October report, the quits rate fell to 1.8% from 2.0%, while the vacancy rate was unchanged at 4.6%. Elsewhere, the ISM Services PMI is seen inching down a little in December. Currently, the index is well within Monday’s 98.25-98.86 range, and on either side of its 100 DMA (98.59).
• EUR/USD was initially pressured, continuing the downside seen in the prior session. Though the downside did reverse following the EZ HICP release, which printed in-line with expectations, seemingly as bets for a cooler-than-expected print following the German series unwind. Currently just shy of the 1.1700 mark, after making a peak of 1.1702 overnight.
• AUD/USD is choppy following overnight outperformance given softer-than-expected monthly inflation, but as the headline figure and the core reading remain sticky and above the RBA’s 2-3% target.
• USD/JPY found resistance at yesterday’s high and remains within that session’s 156.30-156.80 parameter. Other G10s are largely uneventful and follow the choppy price action.
• PBoC set USD/CNY mid-point at 7.0187 vs exp. 6.9896 (Prev. 7.0173).

Fixed Income

• A firmer start for fixed income. Initial gains were a familiar ~ 5 and ~ 20 ticks for USTs and Bunds, respectively.
• During the early European morning, the benchmarks picked up further, to highs of 112-17+ and 128.19, firmer by 7+ and 51 ticks at most, respectively. A move that occurred in relatively limited newsflow, but as the European risk tone soured. A deterioration that extended on the mixed/downbeat APAC performance, as the region failed to sustain record Wall St. levels.
• EZ HICP Flash figures for December printed in-line with expectations (though the core figures were a touch short of expectations). Some pressure was seen in Bunds following the release, as participants unwound bets for a cooler print after the prelim. German inflation series. Also, no move to Construction PMIs this morning or a dire set of German retail data. However, on the latter, the implications have perhaps been limited given the marked upward revision to the prior (October) series.
• Finally for Bunds, around five ticks of pressure were seen following the tepid results for the new 2036 Bund line. Currently trading at 128.20.
• Gilts acknowledged the bullish action in peers and opened higher by 29 ticks at 92.54 before extending to a 91.84 peak and are currently leading the fixed space. Thereafter an above 3x b/c to a 5yr Gilt auction spurred some very modest upside in Gilts, taking UK paper above the 92.00 mark.
• UK sold GBP 4.25bln 4.125% 2031 Gilt; b/c 3.50x (prev. 3.23x), average yield 3.980% (prev. 4.093%), tail 0.2bps (prev. 0.2bps).
• Germany sells EUR 4.542bln vs exp. EUR 6bln 2036 Bund; b/c 1.29x, average yield 2.83%, retention 24.3%

Commodities

• WTI and Brent futures fell after Washington moved to tighten control over Venezuela’s oil industry, with President Trump saying Venezuela would hand over up to 30-50mln bbls of crude to the US to be sold at market prices, with proceeds managed by the President for the benefit of both countries. Nat Gas on the other hand rebounds following yesterday’s slump cited by some to a warmer-than-expected winter.
• Gold eased as focus shifted away from geopolitical risk toward upcoming US data releases, with bullion finding resistance at USD 4,500/oz and now trading near the bottom end of a USD 4,441.44-4,500/oz after a more than 4% rally across the prior three sessions. Meanwhile, Chinese gold reserves data this morning showed rising reserves for a 14th consecutive month. Spot silver fell back under USD 80/oz after peaking at USD 82.77/oz earlier.
• 3M LME copper prices are choppy but holding above the USD 13k/t mark and not far off record highs, with Friday also in focus amid a potential SCOTUS ruling on the Trump tariffs.
• Chevron (CVX) , ConocoPhillips (COP) and Exxon Mobil (XOM) will meet with US President Trump on Friday, according to WSJ.
• US President Trump posted “I am pleased to announce that the Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America”. Full post “I am pleased to announce that the Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America. This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States! I have asked Energy Secretary Chris Wright to execute this plan, immediately. It will be taken by storage ships, and brought directly to unloading docks in the United States. Thank you for your attention to this matter!”.
• US Private Inventory Data (bbls): Crude -2.8mln (exp. +0.5mln), Distillate +4.9mln (exp. +2.1mln), Gasoline +4.4mln (exp. +3.2mln), Cushing +0.7mln.
• Several oil storage tanks are on fire in Russia’s Belgorod region after a Ukrainian drone attack, according to the regional governor.

Geopolitics: Ukraine

• Ukrainian drone hits apartment building in Tver, Russia, according to Sky News Arabia.
• Russia sends a submarine to escort tanker the US tried to seize off Venezuela, according to WSJ.
• Several oil storage tanks are on fire in Russia’s Belgorod region after a Ukrainian drone attack, according to the regional governor.

Geopolitics: Middle East

• “Iran’s president called on law enforcement agencies not to attack protesters”, Sky News Arabia reported.
• “Iran’s army chief: Trump’s and Netanyahu’s statements on the demonstrations represent a threat to which Tehran will respond”, Sky News Arabia reported.
• US President Trump presses Venezuela to dismiss agents from China, Russia, Iran and Cuba, according to Axios.

Geopolitics: Others

• “Iran’s president called on law enforcement agencies not to attack protesters”, Sky News Arabia reported.
• Yemeni Saudi-backed government forces reportedly advance towards Aden.
• “Iran’s army chief: Trump’s and Netanyahu’s statements on the demonstrations represent a threat to which Tehran will respond”, Sky News Arabia reported.
• China’s Foreign Ministry accused the US of bullying and using brazen force, in regards to Venezuela.
• Ukrainian drone hits apartment building in Tver, Russia, according to Sky News Arabia.
• South Korea President Lee said China may move structure in the sea between the two countries.
• US President Trump presses Venezuela to dismiss agents from China, Russia, Iran and Cuba, according to Axios.
• China’s Taiwan Affairs Office named two people to be punished for Taiwan independence activities, while it stated the people as well as their relatives are banned from entering the mainland, Hong Kong and Macau.
• Russia sends a submarine to escort tanker the US tried to seize off Venezuela, according to WSJ.
• US President Trump’s administration warns Venezuela’s Interior Minister to cooperate or face potential targeting, according to sources.
• US said military is among ‘options’ to acquire Greenland and annexation of semi-autonomous territory from Denmark is ‘national security priority’, according to FT.
• US Secretary of State Rubio told lawmakers that US President Trump aims to buy Greenland, and downplayed military action, according to WSJ.

US Event Calendar

• 8:15 am: Dec ADP Employment Change, est. 50k, prior -32k
• 10:00 am: Dec ISM Services Index, est. 52.2, prior 52.6
• 10:00 am: Nov JOLTS Job Openings, est. 7647.5k, prior 7670k
• 10:00 am: Oct Factory Orders, est. -1.19%, prior 0.2%
• 10:00 am: Oct F Durable Goods Orders, est. -2.2%, prior -2.2%
• 10:00 am: Oct F Durables Ex Transportation, est. 0.2%, prior 0.2%
• 10:00 am: Oct F Cap Goods Orders Nondef Ex Air, prior 0.5%
• 10:00 am: Oct F Cap Goods Ship Nondef Ex Air, prior 0.7%

DB’s Jim Reid concludes the overnight wrap

The strong risk rally of 2026 showed no sign of relenting yesterday, as markets continued to shrug off geopolitical developments. That meant both the S&P 500 (+0.62%) and Europe’s STOXX 600 (+0.58%) advanced to new record highs. Moreover in Europe, there was also a decent bond rally thanks to some soft inflation numbers, raising hopes that the ECB’s next move might still be a cut rather than a hike, particularly after the final composite PMIs were a bit weaker than expected. So it was a strong day for the most part, whilst Brent crude oil prices (-1.72%) reversed Monday’s rise as fears of disruption to oil flows from Venezuela eased. Oil is down a similar amount again overnight as Trump has announced that 30-50m barrels will be delivered to the US from Venezuela and most Asia equities have finally paused for breath this morning, trading lower.

In terms of the latest in Venezuela itself, there weren’t really any major developments in the last 24 hours. But multiple press outlets reported that the Venezuelan regime was cracking down on dissent as they sought to consolidate their power after Maduro’s removal. So with the regime still in power, it remains unclear exactly how the US would be involved with the country’s administration over the short-to-medium term, although Trump previously said on Sunday that “If they don’t behave, we will do a second strike”. In the meantime, Venezuela’s assets continued to recover yesterday, with the 2027 bond up another +2.22% to 43.5 cents on the dollar. However, several US energy companies which outperformed on Monday began to struggle again, including Chevron (-4.46%), SLB (-0.39%) and Halliburton (-3.41%), despite the broader move higher in US equities.

Those declines for the oil majors came as Brent crude (-1.72%) erased Monday’s +1.65% rise amid headlines suggesting that the US was keen to avoid disruption to Venezuela’s oil exports. Reuters reported that Venezuela was in talks to export oil to the US while Bloomberg reported that Chevron had booked extra tankers to Venezuelan ports this month, so potentially mitigating the decline in oil shipments from the country amid the recent US naval blockade. Indeed, Brent is trading another -1.65% lower this morning after Trump said last night that Venezuela would turn over “between 30 and 50 MILLION barrels” of oil to the US. There wasn’t much extra detail but this sort of volume is around 30-50 days of pre-US blockade production so this could be the oil that has been sitting around and probably doesn’t mark the start of a trend.  

Whilst investors were focused on Venezuela, there were also fresh headlines on Greenland, as several European leaders issued a statement defending its sovereignty. The group included the leaders of Denmark, Germany, France, the UK, Italy, Poland and Spain, who said that “It is for Denmark and Greenland, and them only, to decide on matters concerning Denmark and Greenland.” It also said that Arctic security must “be achieved collectively, in conjunction with NATO allies including the United States, by upholding the principles of the UN Charter, including sovereignty, territorial integrity and the inviolability of borders. These are universal principles, and we will not stop defending them.” On the other side of the Atlantic, the White House said in a statement to the press that Trump and his advisers were “discussing a range of options” to acquire Greenland and that use of the military “is always an option”.   

For markets at least, there was no sign that all this news was having a particularly large impact, and the recent strength in European assets showed no sign of relenting. In fact, there was a fresh round of optimism after the latest European inflation numbers were weaker than expected, which dampened fears about a potential hawkish pivot from the ECB this year. That came as the German CPI reading fell to +2.0% on the EU-harmonised measure (vs. +2.2% expected), whilst the French reading was in line with expectations at +0.7%. So that cemented expectations that the Euro Area-wide print today might come in on the softer side.  

Those inflation prints and the prospect of a more dovish ECB helped to bring down yields across Europe, with those on 10yr bunds (-2.8bps), OATs (-1.9bps) and BTPs (-3.5bps) all moving lower. Moreover, that trend got further momentum after the final PMI readings were on the weaker side, with the final composite PMI for the Euro Area revised down four-tenths from the flash print to 51.5. That backdrop helped to support equities too, with the STOXX 600 (+0.58%), the FTSE 100 (+1.18%) and the DAX (+0.09%) all at record highs.   

Over in the US, the equity rally also proceeded, with the S&P 500 (+0.62%) exceeding the record high it posted on Christmas Eve. Interestingly, that came in spite of ongoing weakness among the tech mega caps, with the Mag 7 (-0.36%) dragging on the broader index. There were mixed moves within the Mag-7 amid headlines from the CES trade show, with Tesla (-4.14%) leading on the downside after Nvidia (-0.47%) announced plans for a self-driving AI the previous evening. But US equities saw broad gains otherwise, with three-quarters of the S&P 500 constituents higher on the day, while the small cap Russell 2000 (+1.37%) extended its YTD gain to +4.07%. An impressive performance with just three trading days behind us.
In the meantime, US Treasuries lost ground, unlike their counterparts in Europe, with the 2yr yield (+1.2bps) up to 3.46%, whilst the 10yr yield (+1.2bps) reached 4.17%. We did hear from a few Fed speakers as well, although there wasn’t much that shone light on the future policy path. For instance, Governor Miran said “I think that well over 100 basis points of cuts are going to be justified this year.” But that was in line with his previous dovishness, so markets weren’t reactive. Meanwhile, Richmond Fed President Barkin said that “policy will require finely tuned judgments balancing progress on each side of our mandate”, and that it was “a delicate balance”.  

The very strong rally in Asian equities so far this year has slightly reversed this morning with the Nikkei (-0.96%) and Hang Seng (-1.21%) leading the losses. The KOSPI (-0.21%) and Shanghai Comp (-0.08%) are also lower but with the S&P/ASX 200 (+0.15%) just about defying the regional trend, following a slowdown in Australia’s core inflation in November, which supports the argument for the RBA to maintain current interest rates (details below). S&P 500 (-0.04%) and Nasdaq futures (-0.12%) are trading just below the flat line.

Returning to Australia, CPI increased by +3.4% y/y in November, down from +3.8% in October and below market expectations of +3.7%. On a m/m basis, the headline CPI remained unchanged at 0.0%. The trimmed mean CPI, which is the RBA’s preferred measure of inflation, slowed to 3.2% y/y from +3.3%, aligning broadly with expectations. On a monthly basis, trimmed mean inflation rose by +0.3%, remaining consistent with October’s figures. Meanwhile, the Australian dollar (+0.33%) continues its winning streak for the fourth consecutive session, trading at 0.6760 against the US dollar, despite the easing of inflation in Australia during November. Additionally, yields on Australia’s 10-year government bonds are -2.9bps lower, currently trading at 4.76% as I write this.

Looking at the day ahead, data releases include the Euro Area flash CPI print for December, German unemployment for December, whilst in the US there’s the ISM services index for December, JOLTS job openings for November, and the ADP’s report of private payrolls for December. Otherwise, central bank speakers include the Fed’s Bowman and the ECB’s Pereira.