The Supreme Court kept us waiting, but the NY Giants definitely acted swiftly this week. There was a lot of anticipation on Wednesday that the court would announce its decision on the legality of the IEEPA tariffs. But after issuing a few opinions on other cases, they closed up shop for the day. Unlike the Justices, John Harbaugh and Giants ownership did not keep us waiting, acting swiftly in naming Harbaugh as the new Head Coach.

We're seeing a different complexion in stocks to start the year. The S&P 500 is up about 1% YTD. However the equal-weight index is outperforming by over 200 basis points. Mid cap and Small cap indexes are outperforming by around 500bp. The driving force for that is a strong rotation in sector leadership. Unlike last year it’s not Tech dominating everything else- though semis are ripping higher. Three cyclical sectors- Energy, Industrials and Materials- are the top performers.

Financials and the major banks kicked off earnings season. It was a tale of decent earnings but poor price reactions. Real Estate, Consumer Staples, Industrials and Energy led the pack this week. REITS were strong across the board even as yields backed up several basis points across the curve. Major retailers, food and beverage names drove Staples higher, and tobacco names were up ~7%. For Industrials, Aerospace/defense names led along with construction and electrical names. Crude’s gains took Energy higher. Consumer Discretionary was a laggard as travel and leisure names were pressured. Healthcare didn’t get a bump from the JP Morgan Healthcare conference. Med Devices and managed care sold off. President Trump announced a “Great Healthcare Plan” but the details were lacking, with many programs already getting up and running. Tech was down on the week but there was a significant split between semis and equipment names (strong) and software (not strong, at all).

Markets will be closed on Monday for Martin Luther King Jr. Day. Earnings will get heavier, led by Financials again but broadening. The biggest US data will come towards the end of the week with the PCE price index. Flash PMIs will be released as well. In more Supreme Court news, oral arguments in the Lisa Cook case will be held and the Fed blackout period begins. We also get Pending Home Sales, weekly jobless claims and final Q3 GDP. On a more global scale, the World Economic Forum will take place in Davos.