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- 🛩️ Delta Fails to Take Off
🛩️ Delta Fails to Take Off
PLUS: JPMorgan leads bank sell-off
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Market Performance
S&P 500: 6,963.74 ⬇️ 0.19%
Nasdaq: 23,709.87 ⬇️ 0.10%
Dow Jones: 49,191.99 ⬇️ 0.80%
Delta Air Lines announced that virtually all of its 2026 seat growth will be in premium cabins—not economy.
Yes, you read that right. While most travelers are pinching pennies, Delta is doubling down on high-spending customers.
Premium ticket revenue hit $5.7 billion in Q4, overtaking main cabin revenue ($5.62 billion) for the first time—a milestone Delta didn't expect until later this year.
The airline is forecasting 2026 earnings between $6.50-$7.50 per share, potentially a record year despite CEO Ed Bastian's cautious tone about geopolitical uncertainty and tariff risks.
This strategy reveals Delta's conviction that the "K-shaped economy"—where the wealthy spend more while others pull back—isn't just a temporary phenomenon.
They're literally reconfiguring their planes around it.
DAL stock has a Ziggma score of 82 and ranks in the top percentile for valuation and growth
However, the airline giant’s high debt levels weigh on its financial health.
Our Takeaway
Delta's premium pivot is a calculated gamble that affluent travelers will continue spending regardless of broader economic headwinds.
If they're right, it's brilliant.
If consumer confidence cracks at the top, they've bet the farm on shrinking demand.
Either way, this is the clearest signal yet that airlines see economic inequality as the defining market force of 2026.
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Market Overview 📈
Markets stumbled on Tuesday as investors grappled with a barrage of policy proposals from President Trump and disappointing financial sector performance.
JPMorgan dragged down financials despite beating earnings estimates.
The spillover hit Goldman Sachs, Mastercard, and Visa hard, with the latter two dropping 3.8% and 4.5%, respectively, as worst-in-class performers.
Trump's flurry of weekend demands—including bans on defense company dividends and institutional investors buying single-family homes—added to market uncertainty.
Oil prices jumped after the president canceled all Iran-related meetings and threatened a 25% tariff on any country doing business with Iran.
A silver lining emerged from December's CPI report: Core inflation rose just 2.6% year-over-year versus the 2.8% expected, giving markets a brief morning boost.
However, with Fed funds futures pricing in just two quarter-point cuts starting in June, rate relief remains distant.
Trump also renewed attacks on Fed Chair Jerome Powell, calling him "incompetent or crooked" as the DOJ's criminal investigation into Powell continues, raising concerns about central bank independence.
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Stock Moves Deciphered 📈
Shares fell 4.2% despite beating Q4 expectations with $5.23 EPS on $46.77 billion revenue (vs. $5.00 and $46.2B estimates).
Strong trading operations couldn't offset missed investment banking fees and concerns over Trump's proposed credit card rate caps.
CFO Jeremy Barnum signaled industry resistance:
"There are real questions as to whether or not those changes can be affected out of the executive branch without Congressional involvement."
⛏️ Albemarle (ALB)
The lithium miner surged 4.5% on Tuesday and hit new 52-week highs after Deutsche Bank upgraded the stock to buy with a $185 price target (9% upside).
Spot lithium prices have jumped 136% from late June lows amid bullish sentiment for energy storage, renewing sector interest.
💉 Moderna (MRNA)
Shares jumped 17% after CEO Stéphane Bancel projected 2025 sales of roughly $1.9 billion at JPMorgan's healthcare conference, topping the midpoint of early guidance.
The biotech reaffirmed 2026 revenue growth guidance of up to 10% and announced cost-cutting measures with projected decreases in operating expenses, boosting confidence in the company's path to profitability.
Headlines You Can't Miss 👀
📊 44 S&P 500 stocks hit new 52-week highs on Tuesday, including Alphabet, Walmart, and Micron.
🛡️ Global central bankers defended Jerome Powell in a joint statement with ECB's Lagarde and BOE's Bailey, calling Fed independence "a cornerstone of price, financial and economic stability."
🎯 Bank of America raised Alphabet's price target to $370 (11.5% upside) following Apple's Gemini integration for Siri and Walmart's AI shopping partnership announcements.
✈️ Delta ordered 30 Boeing 787-10 Dreamliners with deliveries starting in 2031, marking its first long-haul planes from Boeing since retiring 777s during the pandemic.
📉 Stifel warned the K-shaped economy is "economically unsustainable," forecasting slowing consumption as aggregate labor income falls in 2026, challenging another year of double-digit S&P gains.
🔌 Trump said Microsoft will announce changes to ensure Americans won't face rising utility costs from data center buildouts; shares fell 1% following the Monday evening statement.
⚡ Energy sector momentum builds with over 80% of XLE stocks above 50-day moving averages and 19% at 52-week highs despite crude oil remaining in the $50s.
Trending Stocks 📊
🧨 L3Harris Technologies (LHX)
The defense contractor rallied in early market trading after announcing plans to pursue an IPO of its missile solutions business in H2 2026 through a partnership with the U.S. Defense Department, unlocking value for shareholders.
⬇️ Salesforce (CRM)
Salesforce dragged the Dow Jones index lower, dropping 7% after an update to its Slackbot feature sparked concerns about AI's impact on traditional SaaS business models.
The pullback reflects broader weakness in the software sector and investor skepticism about legacy platforms.
🤖 Advanced Micro Devices (AMD)
KeyBanc upgraded AMD to overweight, citing robust hyperscaler demand benefiting chipmakers.
The stock surged as part of a strong semiconductor sector rally, with AMD's Nasdaq leadership reflecting a promising industry outlook and investor confidence.
What’s Next?
Key market and macro news 👇
🏦 Bank of America (BAC) reports fourth-quarter results before market open. The consensus EPS estimate of $0.95 represents a 15.85% year-over-year increase.
💸 Wells Fargo (WFC) will announce quarterly earnings pre-market. Its expected EPS of $1.66 shows 16.90% year-over-year growth. A consistent track record of beating analyst estimates suggests potential upside surprise for financial sector investors.
💰 Citigroup (C) will release fourth-quarter earnings before the market opens. Consensus EPS forecast of $1.65 reflects 23.13% year-over-year increase, the strongest among major banks.
💵 Producer Price Index, a critical inflation gauge, is expected at 0.2% month-over-month and 2.6% year-over-year. The Core PPI forecast of 0.2% MoM and 2.5% YoY significantly influences Federal Reserve policy expectations and bond market dynamics.
🛍️ Consumer spending data release will measure economic health and household demand. Retail sales are expected at 0.3% month-over-month and 3.0% year-over-year.
🏡 Existing Home Sales data for December will show trends in residential real estate activity. Sales are expected at 4.06 million units, down 1.6% month over month, signaling cooling housing demand and concerns about an economic slowdown.
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