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Daily Commentary
Commentary prepared by Alloya Investment Services, a division of the wholly owned CUSO of Alloya Corporate Federal Credit Union. Alloya Investment Services is a leading broker/dealer consultant to credit unions.
Tuesday, January 13, 2026 at 8:00 am CT
Commentary prepared by Tom Slefinger, Market Strategist
Market Indications
Other Market Indicators
| Market Indicators | ||
|---|---|---|
| 2s/5s Tsy Spread | 0.22 | 0.00 |
| 2s/10s Tsy Spread | 0.65 | 0.00 |
| 2s/30s Tsy Spread | 1.30 | 1.30 |
| DJIA-30 | 49,590.20 | +86.13 |
| S&P-500 | 6,977.27 | +10.99 |
| NASDAQ | 23,733.91 | +62.56 |
| Dollar Idx | 98.96 | +0.10 |
| CRB Idx | 304.04 | +2.57 |
| Gold | 4,584.60 | -12.95 |
Daily Commentary
Recap – In advance of the Q4 earnings season, stocks eked out gains yesterday with the S&P 500 rising 0.2% and Nasdaq gaining 0.3%. Elsewhere, Bitcoin has popped by +1.0% to $91,916 while crude is up to just over $60 per barrel (as President Trump has not ruled out a military response in Iran). Gold is consolidating at $4,590 per ounce, which is near an all-time high, after surging by nearly +2.0% in yesterday’s action. The DXY dollar index is modestly higher at 98.9.
Bond yields in the U.S. have nudged up modestly ahead of today’s December CPI data, which investors see coming in at +0.3% month-over-month for the headline and core (with upside risk). The year-on-year price growth to 2.7% would be consistent with November’s read. The core CPI reading is expected to tick up to 2.7% from November's 2.6%.
In advance of the release, the 10-year Treasury yield is trading just a snick below 4.2% and remains at the high end of the recent range. The long bond is at 4.85%. At the front-end, the twos and fives are yielding 3.54% and 3.76%, respectively. The jitters in the bond market over this number have sent the 10-year TIPS breakeven level back up to 2.3%, the highest it has been since November.
Also undermining the bond market is that U.S. companies are borrowing money at the fastest pace since the pandemic to fund the AI spending boom and M&A activity. In the first week of this year, corporate bond issuance exceeded $95 billion, which is an unprecedented surge. And more supply is coming. Morgan Stanley analysts expect to see investment-grade bond sales this year totaling $2.25 trillion, which would end up eclipsing the 2020 record of $1.9 trillion of new issuance. Credit spread investors don’t seem too fussed that a growing number of companies are now being pushed out of the investment-grade market and into junk (“fallen angels”) or that U.S. business bankruptcies have jumped by +14% over the past 12 months.
As discussed in this week’s Weekly Relative Value, the jobs market is slowing more rapidly than many acknowledge. Have a look at “America’s Job Market Has Entered the Slow Lane” from the Wall Street Journal.
Here’s an excerpt: “The U.S. economy added just 584,000 jobs over the course of last year—about 49,000 a month. That wasn’t only low relative to 2024’s average gain of 168,000 jobs a month, but it was also low compared with a much longer timeline. Outside of the two most recent recessions, 2025 clocked the lowest pace of average monthly job growth in more than two decades. Employment gains in 2025 were driven by the health services sector, which includes healthcare and social assistance. It added about 713,000 jobs.”
The last sentence is the key because health care jobs are sensitive to aging demographics, not the economic cycle. The major point being that over 80% of the employment pie posted outright contractions last year. In the past, that has only happened in the context of NBER-defined recessions. This surely does not feel like an economy growing at 5%.
More on the Potemkin economy. Yesterday, former Fed Governor Larry Lindsey was waxing on about soaring GDP growth (the Atlanta Fed model is above 5% for Q4) but never discussed that 75% of that +4.3% Q3 gain was due to a massive drawdown in savings and a near record drop in imports. Excluding those two factors out, the economy expanded at a measly +1.0% pace. The Atlanta Fed is north of +5.0% for Q4 because of surging gold exports. Big deal.
As I have opined time and time again, the labor market is the achilles heel and it will eventually lead the Fed into lowering the Fed funds rate to neutral as we move throughout the year.
Stay tuned and have a great day!
Economic Calendar
January 12 - 16, 2026
Future Fed Expectations
Source: Bloomberg
| Select Probabilities based on the Futures | |
|---|---|
| Probability of Fed Funds rate CUT on January 28, 2026 | -05% |
| Probability of Fed Funds rate CUT on March 18, 2026 | -21% |
**All quoted rates are indications and are subject to change without notice.
* ISI is a member of the FINRA/SIPC.
The information contained herein is prepared by ISI Registered Representatives for general circulation and is distributed for general information only. This information does not consider the specific investment objectives, financial situations or particular needs of any specific individual or organization that may receive this report. Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities. All opinions, prices, and yields contained herein are subject to change without notice. Investors should understand that statements regarding future prospects might not be realized. Please contact Alloya Investment Services to discuss your specific situation and objectives.