| | Good morning. The Green Bay Packers just suffered the largest blown lead in a playoff game in the franchise's century-long history. OpenAI would like to avoid a similar meltdown. On Monday, The Wall Street Journal reported that the AI giant will air its second straight Super Bowl ad — just as its massive user base lead is starting to slip. Traffic to Google's Gemini chatbot has increased about 28% in the past month since the debut of the platform's latest model, according to traffic analysis firm Similarweb, while traffic to ChatGPT has fallen by about 6% in the same time period. OpenAI still has a sizable lead in monthly visits, drawing about 5.5 billion visits in December compared with 1.7 billion for Gemini, per Similarweb. Then again, the gap is shrinking, and the game is far from over. Remember: The Packers had a 21-3 lead at halftime. | | | | | | | | Economists are banking on Wall Street to reveal the true state of the American wallet. JPMorgan Chase, the largest US lender, will report earnings today, kicking off a parade of bank earnings throughout the week. While the figures will be closely watched for indications of how banks are weathering sticky inflation and declining interest rates, experts seem especially eager for insight into how consumers are coping with weakness in the labor market and broader economic uncertainty. The government shutdown late last year disrupted data collection, and this week's numbers may fill some gaps. Loan loss provisions — the allowance banks set aside to cover bad debt — is a key data point to watch regarding consumer health, Sean Dunlop, director of equity research at Morningstar, told The Daily Upside. "The expectation for loan losses itself is a derivative of banks' expectations for GDP growth, unemployment rates, interest rates, home prices, inflation and a handful of other macroeconomic variables that affect borrowers' willingness and ability to repay their loans," Dunlop says. Credit Card Cap If loan loss provisions are growing, it may be a sign that consumers are cracking under sky-high credit card interest rates. The average rate is 19.65%, according to Bankrate's most recent analysis. That compares with 20.14% a year ago and 13.16% at the start of 2008, the year of the global financial crisis. President Donald Trump says he's trying to remedy that, though it's unclear what the plan is. He took to social media late Friday to declare a one-year 10% cap on credit card interest rates, effective Jan. 20, the anniversary of his inauguration. The news rattled the shares of major banks and credit card processors like Visa and Mastercard, but the industry seems skeptical it will come to fruition. Analysts at Morgan Stanley wrote in a note Monday that a permanent cap is unlikely, pointing to repeated efforts by lawmakers to enact similar rules. The analysts said, however, they can't rule out a "temporary arrangement with banks, given the current administration's economic policies, which have included more direct engagement with Corporate America." The industry was quick to react: - The Bank Policy Institute, American Bankers Association and other industry groups released a joint statement saying that "a 10% interest rate cap would reduce credit availability and be devastating for millions of American families and small business owners who rely on and value their credit cards, the very consumers this proposal intends to help."
- John Ulzheimer, credit expert and president of the Ulzheimer Group who has worked at FICO and Equifax, told Bloomberg that a cap could mean banks stop issuing cards to people with credit scores below a certain threshold.
  Earnings Schedule: JPMorgan is the first of the bank behemoths to offer insight into its financial health heading into 2026. Citigroup, Wells Fargo and Bank of America report earnings tomorrow, while Goldman Sachs and Morgan Stanley share their figures Thursday and PNC on Friday. Bloomberg's data show that analysts expect lenders in the S&P 500 to report year-over-year earnings growth of 8.1% for the fourth quarter. Written by Mallika Mitra | | | | | | | | | Photo via Citizens | | | | | | Institutional investors responded on Monday to the White House's assertion that corporations have no business buying homes: Ban us at your own peril. In a recent press release, the National Rental Home Council (NRHC), an industry group that represents single-family home landlords, argued that, contrary to popular belief, the presence of investor-owned single-family home rentals is a force for affordability. But does reality match the realty claim? Bid Pro Quo In President Trump's Truth Social policy proposal last week, he declared, "People live in homes, not corporations." NRHC's response? Yes, and we make that possible. The group contends that landlord-owned single-family homes help open doors to attractive neighborhoods where many couldn't afford to buy, claiming that home ownership exceeds rental costs on average by around 40%. The group also touted how so-called professional housing providers tend to snap up distressed homes and then make major improvements, which can increase the value of surrounding properties. The Urban Institute, for instance, found that large-scale homebuyer Invitation Homes typically spent nearly $40,000 per home on up-front renovations completed in 2020, much higher than the typical homeowner's average of $6,300. According to the Federal Reserve Bank of St. Louis, the improvements lead to increased home equity across the rest of the neighborhood, too. Most experts still say the leading cause of the locked-up housing market is limited supply, and the Wall Street groups say they help on that side of the equation, too: - Institutional investors remain important buyers of new homes, often serving as the buyer of last resort for homebuilders looking to move inventory and secure more cash to continue building.
- "If you take away a critical buyer, that impacts [builders]," Ali Wolf, chief economist at property data firm Zonda, told Bloomberg. "And if builders aren't building as many homes, that could put an upward pressure on prices."
Who's Counting? One thing is clear: The White House's policy remains strictly in the "proposal" stage, and the details are still being sorted out. Treasury Secretary Scott Bessent has clarified that any policy would ban investors from future home purchases and would not force the sale of any current assets. Meanwhile, institutional investors are pitching their own compromises. In an interview with Bloomberg Television on Monday, Stephen Scherr, the co-president of Pretium, pushed back on the White House's proposal and suggested that firms like his could participate in rent-to-own programs: "Imagine a scenario in which rent is paid, money is held back to provide against a deposit account for a down payment." Written by Brian Boyle | | | | | | Delta reports earnings today after its CEO predicted last fall that the carrier could be cruising toward "the best fourth-quarter performance in our history." Analysts expect Delta's revenue to rise as much as 4% but its earnings per share to fall 17% after turbulence rattled the airline industry. History's longest government shutdown grounded planes across the country in October, with Delta estimating at the time that it'd take a $200 million hit as anxious fliers canceled trips and those who already booked requested refunds. At the same time, severe weather put a chill in holiday vacation plans. Delta's earnings today — plus reports from Southwest, United and American later this month — will show how those conditions affected the industry toward the end of last year and whether clearer skies are ahead in 2026. More Champagne, Fewer Stroopwafels Last year was initially expected to be bumpy for airlines as customers tightened their budgets amid tariff uncertainty, but spending didn't fall across all demographics. Instead, K-shaped trends emerged, with higher-income consumers spending more on travel even as lower-income consumers skipped trips altogether. Airlines aimed for the top of the K by rolling out more splurge opportunities and limiting budget options: - Delta has cut seats in its main cabin to offer more premium tickets and has intentionally stopped handing out as many complimentary upgrades as it was once known for. The airline's premium revenue jumped 9% last quarter to make up 43% of its total haul from passengers. United also garnered gains in premium revenue last quarter as it invested in swankier lodges and upgraded seats with Starlink internet and other perks.
- Southwest's stock climbed this year after it switched from catering to cash-strapped fliers to ones who want to pay for upgrades. Under activist pressure, the airline ditched its open seating policy and scaled back its practice of allowing passengers to check two bags for free. Its CEO said baggage fees will bring in $1 billion annually, while extra legroom upgrades will generate another $1 billion.
Outclassed: Airlines may keep drawing higher revenues from their bougier offerings throughout 2026, as Rimowa-toting travelers splurge on lie-flat seats. That could be bad news for budget airlines, notorious for a lack of recline. Spirit, which filed for bankruptcy twice within a year as of August, has struggled to maintain altitude. Bloomberg reported last month that Spirit could soon merge with another budget carrier, Frontier, to keep low-cost flights alive until customers at the bottom of the K start traveling again. Written by Jamie Wilde | | | | | - Exx-ed Out: President Trump says he may block ExxonMobil from drilling in Venezuela after the oil giant's CEO called the country "uninvestable."
- A Deal A Day: Apple and Google sign multi-year deal to have Google's Gemini power Apple's Siri voice assistant.
- New A.I. Flash Signals Reveal Where S&P 500 Is Headed Next. An A.I. system is already flagging early trend shifts in the S&P 500 and three stocks showing breakout potential. Learn how it works in a free market-movement class and see what it's signaling next. Join the free class.*
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