CWS Market Review – January 27, 2026

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Q4 Earnings Are Looking Good

On Tuesday, the stock market closed at another all-time high. The S&P 500 has climbed higher on the last five days in a row. The index finished Tuesday’s trading at 6,978.60. Ever since the Greenland ructions passed, Wall Street has been in a very good mood. The stock market is already up nearly 2% this year, and we’re still in January.

I always find it interesting how the stock market completely ignores news that we think is incredibly important. Yet at the same time, the market can easily be tripped up by a throwaway comment from some government official.

Wall Street is moving close to the heart of Q4 earnings season and we have some early numbers. So far, 13% of the companies in the S&P 500 have reported earnings. Of those, 75% have beaten expectations, and 69% have beaten on revenue. For Q4, the S&P 500 is on track to report earnings of 8.2%. If that’s right, then Q4 will be the 10th quarter in a row of earnings growth.

So far, six companies have issued positive guidance, and four have issued negative guidance. The index is currently going for 22.1 times forward earnings which is relatively high compared with the last 10 years.

The Magnificent 7 is expected to have Q4 earnings growth of 20.4%. If you exclude that from the S&P 500, then the other 493 companies are expected to show earnings growth of 4%.

For 2026, the Mag 7 are expected to have earnings growth of 22.8% while for the other 493 companies, it’s 12.1%. I should add that analysts have cut their estimates over the past few weeks. That’s a typical Wall Street tactic. Firms convince analysts to drop estimates far enough to where they can beat them, and then they claim victory while ignoring the previous estimate cuts.

On Tuesday, shares of United Health (UNH) plunged 20%. This is also important because UnitedHealth is a component in the Dow Jones Industrial Average. Since the Dow is price weighted, UNH’s fortunes have an outsized impact. Today’s drop dinged the Dow for more than 400 points.

The health insurer posted a modest earnings beat for Q4 ($2.11 vs. $2.10). Revenues were below expectations ($113.2 billion to $113.82 billion). Wall Street had been expecting $454.6 billion.

The problem was that UNH offered weak guidance for 2026. For this year, UNH expects revenues to fall by 2% to $430 billion. This is the first time in 10 years that United Health has had declining sales.

The WSJ reported on Tuesday that the Trump administration plans to keep the rates that it pays medical insurers steady. In 2027, payments would increase by an average of 0.09%. Wall Street had been expecting an increase of 4% to 6%. The increase for last year was 5%.

That news was enough to bring down several related stocks. For example, CVS (CVS) was down 14% on Tuesday.

Silver: The Poor Man’s Gold

In last week’s issue, I told you that the real action lately hasn’t been in the stock market. Instead, it’s been in the gold trading pits. In 18 months, the price for gold has doubled.

I actually understated that because even more intense action can be found in the silver trading pits. In two months, the price of solid silver has doubled.

Two years ago, you could have picked up an ounce of silver for just $22. Lately, silver has been going for $116 per ounce. Yesterday, Ag jumped by more than 14% before pulling back.

Gold broke $5,000 per ounce. This is all part of the “debasement trade.” The idea is that investors are shifting away from dollar-based assets. Other metals have also done well like copper, platinum and palladium.

Silver, which is often called “the poor man’s gold,” has a tendency to do whatever gold’s doing, just a lot more. If gold rallied by 10%, then silver is up by 20%. If gold drops by 10%, then silver is down by 20%.

Gold now trades at less than 50 times silver. That’s the lowest gold/silver ratio in 15 years. During the early part of Covid, gold got to more than 130 times silver.

The Gold/Silver ratio has been an important ratio through history. In ancient Greece, the ratio fluctuated around 10:1 to 13:1. In King David’s time, it was 12:1. Julius Caesar had the ratio at 11.5:1.

In 1792, the U.S. Congress, at the advice of Alexander Hamilton, passed the Coinage Act of 1792. This was the government’s first attempt at price-fixing (and not the last). The act defined a U.S. dollar as 371.25 grams of silver or 24.75 grams of gold. In other words, Hamilton pegged the Gold/Silver ratio at 15. In 1834, Congress had to bump it up to 16.

In 1979-80, there was an absolutely crazy rally in silver when two Texas brothers tried to buy all the silver in the world. What’s even crazier is that if it hadn’t been for those meddling exchanges, they would have gotten away with it.

When Nelson Bunker Hunt and Herbert Hunt started their plan, silver was around $6 per ounce. By early 1980, it got to $50 per ounce. Time Magazine estimated they made between $2 billion and $4 billion in just nine months.

To pull this off, they had to borrow zillions of dollars. At one point, it was estimated that they held one-third of the world’s silver. Tiffany took out a full-page article to denounce them.

The Hunt brothers were the sons of the legendary oilman, Haroldson Lafayette “H.L” Hunt, Jr. Hunt the senior wrote a totally crazy novel based on his idea of a fascist utopia called “Alpaca.” I remember one person calling it “1984, but Big Brother is the good guy.”

Another brother was Lamar Hunt who was one of the most influential people in the development of modern football. He was the one who came up with the name “Super Bowl.” The winner of the AFC Championship Games gets the Lamar Hunt Trophy.

Anyway, back to silver. The Hunts were convinced that the Establishment was out to crush them and they were pretty much right. The exchange changed the margin requirement which forced the brothers to put up much more collateral.

(By the way, one of my first jobs in the industry was making margin calls. That’s not a metaphor. I had to actually call people to tell them they had to sell or put up more money.)

On March 27, 1980, the bottom fell out of the silver market. This is now known as “Silver Thursday.” The Hunts had to put up more money, but they couldn’t reach their margin requirement.

The government was worried (tell me if you’ve heard this one before) that Wall Street banks were so much in debt to the Hunts that if the Hunts went under, so would the banks. In fact, a silver panic could start a banking panic.

The Hunts had finally been broken. Silver didn’t make a new high for 45 years. The Hunts eventually become the models for brothers Randolph and Mortimer Duke in the movie Trading Places.

The Federal Reserve meets again this week. Don’t expect any change on interest rates. The futures market currently thinks there’s a 97% chance that the Fed will leave rates alone. The policy statement will come out tomorrow afternoon. I’ll be curious to see if Jerome Powell discusses the investigation by the DOJ.

Powell’s term ends in May, so he’ll be out in any event. The new frontrunner to be named Fed chair is Rick Rieder from BlackRock. He’s up to 47% at PolyMarket. Rieder has argued that productivity gains from AI have caused inflation to fall lower than we realize. This aligns with President Trump’s view. He appears to be a candidate who would both reassure Wall Street and be close to the president’s views.

Here’s an interesting exchange between Rieder and Barry Ritholtz in 2023:

RIEDER: It was. So Lehman paid a billion dollars for EF Hutton. And I was very lucky, there were 35 of us in the training program ad it looked like we all were going to get fired. And they took two of us, and I’m not sure how I made it through the strainer. But I found somebody who I really liked in the mortgage department and the mortgage agency, mortgage business, and took a liking to me and I went into the training program. You know, then by the way, it wasn’t like the crises ended between 1990 and the recession on the S&L dynamics.

And then in ‘94 and ‘98, you know, all had a different stream to 2002. By the way, it seemed like every four years —

RITHOLTZ: Right.

RIEDER: — there was — and then, you know, punctuating with obviously 2008. But boy, I mean, I went through — and I think I still have a scar tissue to this day of, you know, all of these — by the way, I think it’s an interesting cyclicality to markets, that every four years you need to recalibrate. You know, people are comfortable, leverage builds. And then all of a sudden, sometimes violently, it recalibrates. But I tell you, you know, going through it again in ’22, you know, you just know that the next couple of years are going to be pretty good because you just reprice things again. But I tell you going through those years, I’d love to skip those in my career.

RITHOLTZ: Mark your calendars for 2026.

That’s all for now. Earnings news to dominate the market this week along with the Fed meeting. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Posted by on January 27th, 2026 at 6:09 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.