CPI Cools, JPMorgan Beats But Tanks, and Gold Eyes $5,000 – Market Breakdown #158
Core inflation came in soft, the biggest bank in America topped estimates and got sold anyway, and gold is now up 72% in a year because nothing says "everything is fine" like record precious metals.
📊 THE MARKET BREAKDOWN
Weekly market intelligence for traders who think in systems, not headlines.
Issue #158 – January 13, 2026
🔥 Headlines & Hysteria (powered by Forked Feed)
December CPI Holds at 2.7%, Core Inflation Cools to 2.6%
Forked Feed says: Inflation is officially Not Reaccelerating, which is apparently the best we can hope for in 2026. Core CPI came in at 0.2% month-over-month, beating 72 of 73 forecasts and giving the Fed just enough cover to pretend it still has options. But groceries jumped 0.7% - the biggest monthly increase since 2022 - because your eggs and bread didn’t get the memo about disinflation. Home insurance is up 8.2% year-over-year, also a record. Mark Zandi called inflation “still uncomfortably high” while simultaneously acknowledging it’s cooling. This is the economic equivalent of “I’m not mad, I’m just disappointed.”
JPMorgan Beats Earnings, Stock Drops 4% Anyway
Forked Feed says: JPMorgan reported $5.23 EPS versus $5.00 expected, beat on revenue, posted 40% growth in equities trading, and guided to $103 billion in net interest income for 2026. The stock dropped 4.2%. Investment banking fees missed, and apparently that’s all that matters when you’re already down 6% on credit card cap fears. Jamie Dimon said “everyone we know believes in Fed independence,” which is the most diplomatic way possible to tell the administration to stop threatening to arrest Jerome Powell. The market heard him, nodded thoughtfully, and sold another million shares.
Gold Hits Record High Near $4,630, Analysts Target $5,000
Forked Feed says: Gold is now up 72% year-over-year because investors have collectively decided that owning actual shiny rocks is preferable to trusting the dollar while the DOJ threatens the Fed Chair. HSBC says $5,000 is possible in the first half of 2026. Bank of America agrees. Silver tagged $86. The “debasement trade” is no longer theoretical - it’s the consensus view among institutions who are supposed to maintain decorum about these things. When your options are “hold dollars while the administration tries to jail the central banker” or “hold gold,” the choice is apparently obvious.
Trump Tells Iranian Protesters “Help Is On The Way” as Death Toll Mounts
Forked Feed says: The death toll in Iran is somewhere between 1,850 (HRANA estimate) and 12,000 (Iran International’s editorial assessment) depending on which organization you trust, and a 26-year-old protester named Erfan Soltani is scheduled to be executed tomorrow. Trump tweeted “KEEP PROTESTING — TAKE OVER YOUR INSTITUTIONS!!!” in all caps, which is definitely how geopolitical intervention works. The 25% tariff on Iran’s trading partners is now in effect, which means China, India, Turkey, and the UAE are all technically subject to tariffs on “any and all business” with America. This is either 4D chess or economic nonsense, and either way nobody knows how it gets enforced.
Markets Slip From Records on Bank Selloff and Rotation
Forked Feed says: After posting fresh all-time highs Monday, the S&P 500 and Dow fell from their records Tuesday as banks dragged on the broader market. JPMorgan dropped 4% despite beating earnings. The Dow lost over 0.6%. Soft CPI couldn’t save the tape, which tells you everything about where investor anxiety is actually focused: not inflation, but whether credit card companies are about to become public utilities and whether the Fed Chair is going to get indicted for building renovations. The VIX ticked above 16. MOVE held at 60. Nobody’s panicking, but nobody’s buying either.
🔎 Today’s Focus — “The Bank That Beat Everything and Still Got Sold”
JPMorgan Chase reported fourth quarter earnings this morning that, by any traditional measure, were excellent. Earnings per share of $5.23 crushed the $5.00 consensus. Revenue hit $46.77 billion against $46.2 billion expected. Net interest income grew 7% to $25.1 billion. Equities trading surged 40%, beating estimates by $350 million. Full-year net income was $57 billion. Return on tangible common equity was 20%.
The stock fell 4.2%.
This isn’t a rational response to earnings. This is a market pricing in regime change for the entire banking sector. Credit card rate caps, if implemented, would devastate consumer lending economics. The DOJ investigation of Jerome Powell signals that Fed independence is negotiable. And JPMorgan, as the largest bank in America, sits at the center of all of it.
Jamie Dimon’s comments on the earnings call were notable for their restraint and their pointed defense of institutional norms. “Everyone we know believes in Fed independence,” he said. This is Dimon doing what Dimon does - signaling to Washington without crossing lines that would invite retaliation. He called the U.S. economy “resilient” but warned that “markets seem to underappreciate the potential hazards.” Translation: you all seem very calm about things that should terrify you.
The investment banking miss was real but not catastrophic. M&A advisory and underwriting revenue both dropped, and while equities trading was stellar, fixed income trading was merely fine. In a normal quarter, this would be a “beat and hold” result. In this quarter, it was an excuse to sell.
What the JPMorgan selloff reveals is the market’s true fear: that policy uncertainty has become structural. Banks don’t know what interest rates they’ll be allowed to charge. They don’t know who will run the Fed in six months. They don’t know whether the administration will attempt to nationalize credit markets through executive order. In that environment, even a great quarter isn’t enough.
The rest of bank earnings week will be watched closely. Goldman, Wells Fargo, Citi - all will report against this backdrop of uncertainty. If they beat and sell like JPMorgan, the message is clear: fundamentals don’t matter until the policy fog lifts.
⚡ The Setup
SPY ~ 693.77 | BTC ~ 95,294 | US10Y ~ 4.18% | DXY ~ 99.18
The S&P 500 retreated from Monday’s record high, with the index slipping as bank stocks led the decline. The Dow Jones Industrial Average fell 0.6%, dragged lower by JPMorgan’s 4% drop despite the earnings beat. The Nasdaq Composite dipped 0.2% as mega-cap tech paused after Alphabet’s $4 trillion celebration the day before. The Russell 2000 also pulled back from its record as the “buy everything” trade hit a speed bump.
December CPI landed right on expectations for headline at 2.7% year-over-year and slightly cooler on core at 2.6%. The soft core reading - just 0.2% month-over-month versus 0.3% expected - was the best news the Fed has gotten in months, but it wasn’t enough to move rate expectations materially. Markets are still pricing two cuts in 2026, with the Fed expected to hold steady at the January meeting. The data removes one risk (reacceleration) without creating a new catalyst (imminent cuts).
Banks got destroyed. JPMorgan’s 4% decline set the tone, with the entire sector trading as though the credit card cap is already law. Citigroup, Bank of America, and Wells Fargo all extended Monday’s losses. The KBW Bank Index has now given back most of its post-election gains. Credit card stocks remain under acute pressure: Capital One is down roughly 12% in two days.
Gold pulled back slightly from Monday’s record of $4,627 but remains elevated at $4,620. Silver trades at $89.73 after touching $86 yesterday. The precious metals rally shows no signs of exhaustion as investors continue to hedge against Fed independence risk and Iran-related supply disruptions. Multiple banks have now issued $5,000 gold targets for 2026.
Bitcoin caught a bid, trading at $95,294 as risk assets stabilized. Ethereum sits at $3,324. The crypto complex is benefiting from the broader “debasement trade” narrative even as it continues to lag gold’s performance on a relative basis. ETF flows remain mixed, with institutional interest inconsistent.
Oil trades at $60.98 on WTI as Iran supply concerns are balanced against demand uncertainty. The 25% tariff on Iran’s trading partners has unclear implementation mechanics, leaving traders unsure how to price the disruption. The 10-year yield is flat at 4.18%, largely unchanged despite the soft CPI print. VIX ticked up to 15.98, slightly elevated but not alarming.
🧩 Market Archetype — “The Policy Hostage”
Today’s market isn’t trading on fundamentals. It’s not trading on technicals. It’s trading on policy uncertainty, and specifically on the question of whether traditional rules still apply.
JPMorgan posted excellent earnings and got sold. Why? Because investors don’t know if credit cards will be profitable in six months. CPI came in soft and the market shrugged. Why? Because nobody cares about inflation data when the Fed Chair might be indicted. Gold hit records and kept going. Why? Because the dollar’s backing is only as good as the institution that manages it.
The Policy Hostage market is one where price discovery breaks down. You can’t value a bank if you don’t know what interest rates it can charge. You can’t value the dollar if you don’t know whether the Fed is independent. You can’t value risk assets if you don’t know whether the next tariff announcement is coming via Truth Social at 2 AM.
In this environment, the winners are assets with no counterparty risk: gold, silver, hard commodities. The losers are anything dependent on regulatory clarity: banks, credit companies, anything that needs to plan more than one quarter ahead. The middle ground is getting squeezed out.
🧭 Flow Pulse
Bank flows were uniformly negative and heavy. JPMorgan saw massive selling despite the earnings beat, with volume elevated as institutions repositioned. The entire financials complex traded together, with correlation approaching 1.0 across major banks. Options flow tilted heavily bearish, with put buying accelerating through the session. The message from institutional money is clear: policy risk trumps earnings.
Gold and precious metals saw continued accumulation. The yellow metal pulled back slightly from Monday’s highs but remains near records as investors add to safe-haven positions. Silver flows were strong, with the metal outperforming gold on a percentage basis as the “poor man’s gold” trade attracts retail interest. Mining stocks caught a bid as gold’s rally filters into equities.
Tech flows were mixed. Alphabet held gains from Monday’s $4 trillion celebration, but the broader mega-cap complex was flat to lower. There was no obvious rotation out of technology into banks - money just left banks. Defensive sectors like utilities and consumer staples saw mild inflows as investors reduced cyclical exposure.
Treasury flows were muted despite the soft CPI. The 10-year yield barely moved, suggesting the market has already priced in “higher for longer” and won’t be easily dislodged by one data point. Short-dated flows reflected continued expectations of Fed patience, with January meeting probabilities unchanged at 95%+ for a hold.
Crypto flows improved modestly. Bitcoin ETFs saw mild inflows after several days of outflows, with BTC reclaiming $95K. Ethereum held above $3,300. The crypto market is trading more like a risk asset than a safe haven, moving with equities rather than gold.
Forked Feed says: The flow story today was institutions deciding that beating earnings doesn’t matter when the government is floating credit card price controls and threatening to arrest the Fed Chair. JPMorgan reported a blowout quarter and got sold like it was a regional bank in March 2023. Gold kept rallying because at least Comex doesn’t have to worry about Truth Social. The VIX is at 16, which is either complacency or exhaustion - hard to tell which.
🔮 Forked Forecast
Base Case (55%): Choppy Consolidation Below Records
Markets digest CPI and bank earnings while awaiting further policy clarity. The soft inflation print removes reacceleration risk but doesn’t spark a rally. Banks remain under pressure until credit card cap fears fade or are confirmed. Gold consolidates near highs. S&P holds 6,900-7,000 range. Earnings from Goldman and other banks provide additional data points but don’t change the narrative.
Bull Case (20%): Earnings Lift Sentiment, Policy Fear Fades
More bank earnings come in strong, and the market decides JPMorgan was oversold. Credit card cap rhetoric is seen as posturing rather than policy. Powell investigation seen as going nowhere. Risk-on resumes with S&P pushing toward 7,100. Banks recover. Gold pulls back on reduced haven demand.
Bear Case (25%): Policy Uncertainty Intensifies
Credit card cap details emerge that confirm implementation pathway. Powell investigation escalates with additional subpoenas. Iran situation deteriorates with Soltani execution prompting Trump response. Banks extend selloff as policy uncertainty weighs. VIX breaks 20. Gold pushes toward $4,700. S&P tests 6,800.
Triggers to Watch:Erfan Soltani execution (scheduled Wednesday) - potential Trump response
Additional bank earnings (Goldman, Wells Fargo, Citi)
Any White House clarification on credit card cap mechanics
Powell investigation developments
China response to 25% Iran trading partner tariff
💬 Final Thought
There’s a version of today’s market action that makes perfect sense: soft CPI, earnings beat, stocks flat to lower as investors take profits near records. Normal stuff. Healthy consolidation.
But that’s not what happened. What happened was JPMorgan posting one of its best quarters ever and getting sold like it just announced a DOJ settlement. What happened was gold hitting $4,627 because investors would rather own metal than dollars managed by a central bank under criminal investigation. What happened was a 26-year-old Iranian protester getting scheduled for execution while the President tweeted “HELP IS ON THE WAY” in all caps.
None of this is normal. The inputs to the market - CPI data, earnings reports, Fed policy - are being overwhelmed by the policy uncertainty overlay. You can have the best earnings in banking history, and it won’t matter if the government is about to cap your credit card rates. You can have inflation cooling to multi-year lows, and it won’t matter if the institution managing monetary policy is politically compromised.
The market knows this. That’s why JPMorgan fell on a beat. That’s why gold is up 72% in a year. That’s why the VIX is creeping higher even as records get touched.
We’re in a Policy Hostage market now. The fundamentals are fine. The institutions are under siege.
That’s all for issue #158. CPI was fine, earnings were fine, but nothing is fine.
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