☕ What’s next for the Fed, Palantir and Taiwan Semiconductor
Jan 12, 2026Howdy! 👋
A down Monday, no big deal.
But down because of a criminal probe filed against the Chairman Powell?
Holy printing presses, Batman!
All three indices are down in early going as global traders and investors assess what this means for the US Dollar, for US markets, and any remaining credibility the Fed might have.
Stay focused.
As nasty as this could get, the world’s best companies are going to press on anyway.
And that’s where you want to remain focused.
Not for nothing but I think there’s an outside chance the markets go green relatively quickly into what I expect to be yet another strong earnings season. Starting with tech and the Nasdaq.
Invest in optimism because cowering in pessimism is to ignore history.
Here’s my playbook.
1 – The Fed, Palantir and Taiwan Semiconductor
The venerable Stuart Varney kindly asked me back this morning ahead of the opening bell for a chat about the Fed situation, Palantir and Taiwan Semiconductor. (Watch)
Hope my perspective is helpful but, more importantly, profitable too!
2 – What I am about to say will be regarded as financial heresy by many
U.S. President Donald Trump has launched a DOJ probe into Powell’s activities and is reportedly threatening criminal indictment. (Read)
Janet Yellen has now jumped into the fray calling what’s happening “chilling” when it comes to Fed independence. Other “experts” including Greenspan, Bernanke etc. are all weighing in similarly. (Read)
That’s rich.
The Fed’s independence has always been a shill show.
Yellen herself, back when she ran the place, didn't exactly operate in a vacuum away from politics. The Fed under her watch kept rates pinned near zero while the government piled on debt like there was no tomorrow. Bernanke and Powell simply added fuel to the fire.
Now they’re sounding the alarm???!!!
Spare me.
The hand-wringing is going to come from many of the same folks who conveniently trot out the "independence" line whenever someone pushes back on their preferred easy-money regime.
History is clear.
The Fed was born in 1913 partly to stabilize banks after panics, sure, but it quickly became a partner in funding wars and deficits, expansion and contraction, excess and slim pickings.
Case in point, the Treasury-Fed Accord in 1951 supposedly freed the central bank from pegging rates to help the government borrow cheap, but even that was more theater than reality. The Fed still quietly supported Treasury financing for decades after.
Think WWII and the explicit rate caps used to fund the war effort.
The 1960s and 1970s when political pressure to finance Vietnam and the Great Society helped fuel inflation. Nixon strong-arming Arthur Burns ahead of the 1972 election to keep money easy.
Greenspan riding dot-com excess and slashing rates post-2000 to cushion Washington’s fiscal ambitions.
Or Bernanke’s QE programs that conveniently absorbed massive post-crisis and post-pandemic debt issuance.
Different decades, but always the same playbook.
I am not defending the president’s actions, so let’s be clear about that; I do money, not politics.
The point I want to make is that every sitting US President jawbones the Fed sooner or later. Congress tweaks the “mandate” when it suits them, and the revolving door between the Fed, Treasury, and big banks spins nonstop.
The Fed isn't an apolitical monastery, but a powerful institution born of the need to influence markets and shaped by politics from day one.
Let’s not kid ourselves.
When rates are low and money flows, nobody cries foul about "independence." When a president leans hard the other way, suddenly it's a crisis.
Our job as investors is to find a path forward anyway.
Keith’s Investing Tip: Believe what you see, not what they tell you to believe, which is closely related to always do what Wall Street does, not what it says. One more thing to think about… the markets don’t care how you feel. Every seller bailing out isn’t heading for the exits in a vacuum. Smart buyers are already on the hunt for the best stocks.
3 – Aldi’s impact on grocery stores
German-owned Aldi plans to open 180 stores in the US this year. (Read)
And it’s privately owned so we can’t buy shares dang it.
You may already shop at Aldi’s but if not, you oughta pay ‘em a visit.
Consumers are learning that you can buy great stuff on the cheap at discounters which are increasingly local, convenient and inexpensive.
I love the play here.
- More Aldi erodes big store market share and puts pressure on the incumbents.
- Ultra-low Aldi pricing exposes big grocery bloat and will result in lower prices for consumers because the big stores will need to respond with discounts or more realistic prices lest they lose more customers. Every time Aldi shows up in a new location, local grocery prices drop 10-15%, btw.
- Something like 90% of Aldi’s inventory base is private label which means that the broad assortments in conventional grocers could narrow considerably.
Trade Idea: Long Walmart and short and simultaneously buy putskies on both Albertsons and Kroger.
4 – Apple picks Google’s Gemini to run AI-powered Siri
CNBC is reporting that Apple’s finally coming on the field with a multi-year AI partnership incorporating Google’s Gemini for new Apple foundational models and, of course, Siri. (Read)
I would have preferred to see Grok but that’s just me.
The Gemini tie up potentially accelerates AI into what is now the world’s single, biggest, most valuable consumer base … Apple’s 2.5B+ installed devices.
Wall Street will probably continue to stomp on Apple for a while longer but to a point I have made many times over that’s not atypical… right before Apple takes off (again).
And if you can’t “buy” the logic, don’t worry.
You don’t have to.
Apple is one of the most widely held stocks in the world which means that billions of investing accounts all over the planet will. Pension funds, ETFs, mutual funds, private players and so on.
Meanwhile, Alphabet is on a tear, having returned ~72% over the past 12 months.
Tip o’ the hat to everybody who owns it! 💯
5 – Capping credit card rates unleashes three big opportunities
U.S. President Donald Trump proposes capping credit card rates at 10% for a year starting January 20, 2026. (Read)
Wall Street thinks it’s a low probability risk, but that’s like asking a person with scissors if you need a haircut.
Bankers say it’s a no-go because it’s devastating but only because it just made their yacht payments more expensive.
Clickbait artists will view it as another opportunity to cry wolf.
I couldn't care less about those things.
Chaos creates opportunity.
The real risk (and opportunity in this instance) is that banks turning off the plumbing for consumer lending will potentially force millions of marginal credit card users into the dark world of payday loans and pawnshops. Personally, I think that stinks but that’s moot.
There are a couple of avenues from an investing standpoint.
- Capital One – a major consumer credit player – is down hard but could roar back if the cap doesn’t come to fruition. Calls if you believe the President’s plan is a non-starter. LEAPs could be attractive, too. Puts if the cap looks like a thing.
- BNPL stocks like Affirm and Klarna could boom by charging merchants. Calls if the cap looks likely, otherwise, Sell Cash Secured Puts or use LowBall Orders to buy shares at a big discount if the cap fails. Perhaps a few shares at $60 and a few more at $40 - $50. 🤷🏻
- Or, my preference, simply Buy the best, ignore the rest™ and be done with it. JPM.
Keith’s Investing Tip: Investing successfully over long periods of time is about constantly weighing alternatives, not simply “collecting” stocks which is what most people do.
Concentration is the new diversification and if you’ve got that covered, awesome. Most investors don’t. Meanwhile, I’ve got a few ideas and would love to toss my hat in the ring if that’s helpful.
Bottom Line
People view investing as a competition.
Not true.
Investing is a journey.
First, you learn how to lose.
Second, you learn how to learn.
Third, you make money using what you've learned.
As always, let’s MAKE it a great day and start the week strong.
You got this — I promise!
Keith 😀
