Good morning, investors. Another trading day, another record close for stocks.

In fact it was the fourth all-time high of the year for the S&P 500.

Traders are bracing for what the Federal Reserve announces this afternoon — though prediction markets see no shot of a rate cut.

The US dollar just fell to its lowest level in four years and it wasn’t because the Fed cut interest rates.

Rather, the currency tumbled after President Trump publicly dismissed concerns about the dollar’s decline, reinforcing the market’s view that Washington is unlikely to resist a weaker exchange rate.

When asked about the dollar’s 10% drop in 2025, he shrugged it off.

“No, I think it’s great,” President Trump said.

“Look at the business we’re doing. The dollar’s doing great.”

The US Dollar Index — which tracks the greenback’s strength against a basket of currencies — slid more than 1% following those comments, marking its steepest one-day drop since April.

Gold, meanwhile, continued to break new highs. 

Some of the dollar’s recent weakness can be traced to a rising Japanese yen and speculation around a potential currency intervention from Tokyo. But that alone doesn’t explain the entire move.

Much of it is a confidence game. Over the past year, investors have been forced to price in swelling government debt, start-and-stop tariffs, and renewed uncertainty around Fed policy.

Together, that mix dragged the dollar to one of its weakest performances in years.

Under normal circumstances, a Fed holding rates steady alongside higher Treasury yields would support the currency. 

That hasn’t been the case this time.

One way to think about a weaker dollar is that it loosens financial conditions without a rate cut.

It boosts US exporters, inflates overseas earnings for multinational companies, and ultimately drives capital into safe havens like gold. 

Since returning to office, President Trump has made clear his preference for lower interest rates. Markets are now trying to figure out how much easing can arrive through the dollar instead of the Fed. 

In practice, a weaker currency eases financial conditions at the margins while supporting corporate profits — two things, of course, that help prop up asset prices.

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📉Consumer confidence hit the lowest level since 2014. The Conference Board’s survey is now below pandemic-low levels, with the report coming out on the same day the S&P 500 closed at a record high. (Yahoo Finance)

📦UPS will cut another 30,000 jobs. This follows the elimination of 48,000 jobs in 2025, and it’s part of the company’s broader turnaround strategy as it winds down its partnership with Amazon. (CNBC)

🏥 Healthcare stocks just shed $90 billion in market cap. Shares of big insurers plunged after Medicare’s agency proposed a relatively flat rate increase for next year, well below the expectation for a 5% increase. (WSJ)

Silver prices have exploded to start the year so I sat down with macro commentator Jack Farley to unpack the metals melt up, the stock picks that could benefit from rising silver prices, and whether the “Sell America” trade holds weight.

Tune in on YouTube, Spotify, or Apple Podcasts.

🗓 January 28, 1965: The Dow Jones Industrial Average closed above 900 for the first time ever as part of a long post-WW2 bull market.

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