MW Follow the White House as it picks stock-market winners and losers, says Fundstrat's Tom Lee.
By Barbara Kollmeyer
DC is flagging just one winner so far
Fundstrat's Tom Lee says investors would be wise to follow signals from Washington when it comes to stocks in the new year.
Major indexes tripped up and broke a three-session win streaks as it seems geopolitics and worries over Fed independence might be starting to rattle investors. That's as earnings season kicks off with big banks.
Our call of the day from Fundstrat's head of research Tom Lee says investors would be wise to following the White House to determine outperforming stocks early in the year.
And while incoming data is looking dovish for monetary policy thus far, the "bigger story is Washington is picking winners and losers," Lee told clients in a video update.
Lee lists the three "losers" as credit-card companies, the Federal Reserve and institutional buyers of mortgages. Capital One $(COF)$, Synchrony Financial (SYF), Citigroup (C), JPMorgan Chase $(JPM)$ and Bank of America (BAC) all took a hit early Monday after President Donald Trump called for a 10%, one-year cap on interest rates for credit cards.
"I guess the thinking is of course, reduce the cost to borrowers," said Lee. However, quoting Tom Block, former lobbyist for JPMorgan, this means banks must be careful about credit risk, so only their best customers will get those credit cards.
"So actually, I think this is credit contracting," Lee said.
The second "loser," surrounds a criminal inquiry into Fed Chairman Jerome Powell by the Department of Justice over his testimony to Congress, which has sparked outcry on Wall Street and led to several global central banks standing in in solidarity with the Fed chief.
Lee said an independent Fed is important, so investors need to wait and see how that plays out.
"Keep in mind, it's tough to buy things that Washington decides are losers, because last year Washington decided healthcare and consulting companies were losers with DOGE and those stocks had a very difficult time," he said.
One winner he flagged was mortgage rates, as Trump has been amping up a drive towards affordability for Americans, with midterm elections looming in November. Earlier this month, Trump said he wanted to keep institutional investors from purchasing single-family homes and also wants to bring mortgage rates down through large purchases of mortgage bonds.
As for what else to own, Lee is looking specifically at stocks that benefit from a stronger 2026. That's energy and basic materials, the Magnificent 7 technology stocks, bitcoin and Ethereum - note Lee is chairman of Ethereum treasury company BitMine Immersion Technologies (BMNR).
Lee also likes industrials and financials even with credit-card headlines - large-cap and regional banks - as well as small-caps.
The markets
U.S. stock futures (ES00) (YM00) (NQ00) are lower, with silver (SI00), gold (GC00) and oil (CL00) higher.
Key asset performance Last 5d 1m YTD 1y S&P 500 6963.74 0.27% 2.40% 1.73% 19.18% Nasdaq Composite 23,709.87 0.69% 2.59% 2.01% 24.50% 10-year Treasury 4.176 1.70 1.30 0.40 -48.10 Gold 4640.2 2.99% 7.11% 7.11% 72.30% Oil 60.63 6.42% 9.90% 5.61% -21.15% Data: MarketWatch. Treasury yields change expressed in basis points
The buzz
Bank of America (BAC) beat fourth-quarter earnings and saw broad-based revenue growth. Wells Fargo $(WFC)$ and Citigroup (C) earnings are also being released after JPMorgan beat estimates on Tuesday.
BP $(BP)$ said will take an impairment charge of up to $5 billion over its renewables arm.
Cybersecurity firms Fortinet $(FTNT)$ and Palo Alto Networks (PANW) are dropping on a report Beijing has told Chinese firms to stop using those U.S. and Israeli companies.
Delayed November retail sales and producer prices are due at 8:30 a.m., followed by December existing-home sales at 10 a.m. The Fed's Beige Book is due at 2 p.m.
Minneapolis Fed Pres. Neel Kashkari will speak at 11 a.m., Atlanta Fed Pres. Raphael Bostic at 12 noon and Fed Gov. Stephen Miran at 12:30 p.m.
The Supreme Court may finally announce its ruling on President Donald Trump's tariffs on Wednesday.
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The chart
This chart shared by Maverick Equity Research shows Nvidia's trajectory since 2017, as the firm predicts the stock could fall as much as 30% this year. Nvidia shares (NVDA) rose 38% last year and are flat in 2026 so far. Maverick also predicts one or two 15% pullbacks for the S&P 500.
Top tickers
These were the top-searched tickers on MarketWatch as of 6 a.m.:
Ticker Security name NVDA Nvidia INFY Infosys TSLA Tesla GME GameStop TSM Taiwan Semiconductor Manufacturing AMD Advanced Micro Devices INTC Intel AAPL Apple PLTR Palantir AMZN Amazon
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-Barbara Kollmeyer
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(END) Dow Jones Newswires
January 14, 2026 07:33 ET (12:33 GMT)
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