Ideas
Banks strong as economy stays good.
Banks and financials are in a strong position: commercial bank loans and leases are upticking, the 10-year/2-year spread supports net interest margins, corporate bond and equity issuance activity is strong, loan and lease losses are flat or lower, and large, mid, and small financial stocks are all confirming the same positive story. This supports the view that the economy is pretty good, not deteriorating.
JPMorgan earns $150M daily, stay long.
JPMorgan is extraordinarily profitable, earning $57.5 billion in 2025, about $150 million per day including weekends. The report shows a resilient US economy with consumers spending, businesses healthy, fiscal stimulus, deregulation, and supportive Fed policy. He calls it a boring call, which is good, and as a long-term shareholder he is comfortable; the stock pullback is not a negative story.
Market broadening supports S&P 500 rally.
The S&P 500 is in a broadening bull market. Even though tech/XLK has recently underperformed sharply, when XLK falls 1% while 350 S&P stocks rally, that has historically been bullish since 2016 because it signals breadth. Equal-weight and cyclical areas are working, and the setup is so bullish it hurts.
Cyclical breadth signals broad market strength.
90% of cyclical sub-industry groups are above their 10-, 20-, 50-, 100-, and 200-day moving averages. Since 2009, when this breadth signal fires, forward returns for the S&P 500 are generally positive, indicating full speed ahead for cyclicals.
Late cycle favors materials rally.
The market is transitioning from mid-cycle to late cycle. Late cycle is when materials start roaring; he points to Freeport-McMoRan, oil stocks, ExxonMobil at record highs, and oil services. If materials catch on, the market could have a couple years of steady economic growth.
Run-it-hot supports commodities and materials.
With a new Fed chair coming in May, policy is likely to run hot and push rates down. A Michael Hartnett chart shows 10-year commodity returns beating bond returns by 8.2% annualized, a rare extreme, suggesting a new commodity bull market. He wants to be in material and commodity stocks.
Energy sector is due to rally.
Energy is the biggest commodity not participating yet; oil is starting to percolate above $60. His best stocks list has seven or eight energy names for the first time, and he thinks the sector is simply due.
Exxon breaking out, buying more.
He bought Exxon and is considering averaging up at $119. The chart is breaking through generational resistance, he targets $150 this year, calls it the best stock in the market, and notes it reacted to Venezuela even though it has no business there. He is long and adding.
Housing cycle boosts homebuilders.
Trump's mortgage proposal is smart and XHB loved the news. If a new housing cycle starts, it adds another reason to be in commodity and material stocks.
Lowe's outperforms Home Depot, breaking out.
Lowe's looks much better than Home Depot, is roaring, and has hard resistance around $285. If it breaks out, there is blue sky with no sellers and no higher prices above. It trades around a 22 multiple, about the same as the market.
Materials stocks breaking out on hot economy.
Martin Marietta, Vulcan Materials, and CRH are breaking out from consolidation. They provide aggregates, concrete, and cement, and the price of these materials is going higher because the economy is running hot. He says you can own both MLM and VMC, and CRH is the bigger global name.
Delta premium demand drives earnings growth.
Delta is guiding to a 20% jump in 2026 earnings with margin expansion. Premium ticket revenue now exceeds main cabin revenue, and Delta sits at the top of the K-shaped economy. Despite a foreign travel headwind in 2025, it produced record revenue and earnings in Q4.
Software basket not working, avoid.
An equal basket of Adobe, Workday, Intuit, Salesforce, and ServiceNow is not working. He says to whack those stocks off your screen and revisit them only when they give a reason to, and he will not revenge-trade Adobe until he sees a convincing bottom.
Russell 2000 turning up this year.
The Russell 2000 has underperformed the S&P 500 in eight of the last nine years, mainly because of hyperscalers. But the ratio has turned up and the bleeding has stopped; he thinks this might be the year. Small caps have about a 5% profit margin versus 14.5-15% for the S&P, so any boost to margins could cause them to be reweighted higher.
This The Compound News video, published January 13, 2026,
features Josh Brown, Michael Batnick
discussing XLF, KBE, JPM, SPY, SP:SPXEW, XLY, XLB, DBC, XLE, XOM, XHB, LOW, MLM, VMC, CRH, DAL, ADBE, WDAY, INTU, CRM, NOW, IWM.
14 trade ideas extracted by AI with direction and confidence scoring.
Speakers:
Josh Brown,
Michael Batnick
· Tickers:
XLF,
KBE,
JPM,
SPY,
SP:SPXEW,
XLY,
XLB,
DBC,
XLE,
XOM,
XHB,
LOW,
MLM,
VMC,
CRH,
DAL,
ADBE,
WDAY,
INTU,
CRM,
NOW,
IWM
