Stocks closed mixed yesterday, albeit mostly higher in uneven trade. The Nasdaq was off -0.44%, while the S&P 500 inched up 0.01%, and the small-cap Russell 2000 surged by 1.11%.

Yesterday's International Trade in Goods and Services report showed the trade balance shrink to -$29.4 billion, down sharply from last month's -$48.1B and the consensus for -$59.1B. It was the lowest level since 2009 as exports rose and imports fell, resulting in the trade gap shrinking by -38.8% last month.

Weekly Jobless Claims rose 8,000 to 208K vs. the consensus for 205K.

And the Challenger Job-Cut report fell to 35,553 vs. last month's 71,321.

But the jobs report everyone is really waiting for is this morning's Employment Situation report. The forecast is calling for 55,000 new jobs in December (55,000 in the private sector and 0 in the public sector), with the unemployment rate expected to remain steady at 4.6%.

The last report we got in mid-December (for November jobs) came in at 64,000 (69K in the private sector and -5K in the public sector), vs. the consensus for 40,000 (30K private and 10K public). The unemployment rate ticked up to 4.6% from the previous 4.4% and views for 4.5%.

The Fed has acknowledged that they see more downside risk to the labor market vs. inflation.

Whatever the report shows, it could have an impact on rates when the Fed meets next on January 27-28.

Also on the radar for today is the potential Supreme Court ruling on tariffs. The Supreme Court has marked Friday, 1/9 as an 'opinion day,' which is when they will begin releasing written decisions in argued cases. They have not said whether they will have a decision on President Trump's tariffs today. But today would be the soonest it could come.

That could have a big impact on the market. Will a favorable ruling for the Administration be cheered, as it will allow the President to continue to pursue his economic agenda, without detour? Or could a negative ruling against the White House weigh on the market, as it will inject new uncertainty into the economy and the market? Or something else?

Late in the day yesterday it was reported that President Trump is "instructing my Representatives" to buy $200 billion in mortgage-backed securities. It's unclear who will buy them or when. But the expectation is that it will help bring mortgage rates down.

For reference, the Fed wasn't outright buying mortgage-back securities (MBS) last year, nor were they reinvesting the principal from maturing bonds back into MBS. That was part of the Fed's Quantitative Tightening where they were letting those securities "runoff" their balance sheet. The Fed announced they would again start buying Treasury bills starting in December. That amounted to about $40 billion. They are expected to do the same in January. Additionally, maturing MBS will be reinvested into T-bills. That could increase the total amount the Fed ends up buying/reinvesting. This Quantitative Easing is only expected to last for a handful of months to shore up liquidity.

I show the Fed's activity to illustrate the size of the $200 billion announcement. It's not a small amount. It's hard to say what kind of impact it will have on rates. Nonetheless, with such a focus on interest rates, it's a development worth watching.

One more trading day before the first full week of 2026 is in the books. So far so good, with all of the major indexes poised to close higher for the week.

Best,