US STOCKS: Midday Equities Roundup: Banks & Nicotine Outperform

The Senate will begin confirmation hearings for President-elect Donald Trump’s cabinet nominations next week. Data from Polymarkets shows bettors are increasingly confident that Trump’s four most embattled Cabinet nominees – Defense Secretary nominee PeteHegseth, FBI Director nominee Kash Patel, Health Secretary nominee Robert F. Kennedy Jr, and Director of National Intelligence nominee Tulsi Gabbard – are all on track for confirmation.

• On January 14, the Senate Armed Services Committee will hear testimony from Hegseth and the Judiciary Committee will hear from Trump’s Attorney General nominee Pam Bondi.
• On January 15, the Judiciary Committee will host Patel and Deputy Attorney General nominee Todd Blanche. The Committee on Environment and Public Works is also likely to hold a hearing for Trump’s nominee to run the Environmental Protection Agency, Lee Zeldin on January 15.
• CBS News reports that Senate Majority Leader John Thune (R-SD), “privately told Trump he believes Hegseth will have the votes to be confirmed as Defense secretary,” despite a string of allegations over his personal conduct. 

Figure 1: Trump Cabinet Nominees, %Implied Probability of Senate Confirmation

Source: Polymarket

US President-elect Donald Trump's Middle East envoy Steven Witkoff has told reporters at Mar-a-Lago that "a lot of progress" is being made towards a Gaza hostage for ceasefire deal in ongoing negotiations in Qatar. 

• Witkoff: "I think they're doing a really good job back in Doha, I'm leaving tomorrow back to go to Doha... We've had some really great progress and I'm hopeful we'll have some good things to announce by [Trump's inauguration on January 20]."
• When asked the status of the deal, Witkoff says: "I believe we've been on the verge of it, I don't want to discuss what's delayed it," adding that Trump's "stature" and "red lines" are "driving the negotiations."
• Asked if he thinks Hamas and Israeli negotiators are waiting for Trump to take office before committing to a deal, Witkoff says: "Nope, I think they heard him loud and clear: Better get done by the inaugural,"
• Trump repeats a previous threat: "If those hostages are not back... by the time I get into office all hell will break out in the Middle East, and it will not be good for Hamas and it will not be good frankly for anyone."

• Stocks are trading weaker at midday, at/near session lows after trading mildly higher on the open. Currently, the DJIA trades down 74.53 points (-0.17%) at 42659.52, S&P E-Minis down 48.5 points (-0.81%) at 5974, Nasdaq down 311 points (-1.6%) at 19560.76.
• Reversing Monday's rally, Consumer Discretionary and Information Technology sectors underperformed by midday, autos and broadline retailers weighing on the Consumer Discretionary sector: Tesla -4.27%, GM -2.30%, Amazon -2.02%, while Ross Stores declined 1.55%.
• Semiconductor makers pared gains from the week opener (despite incoming President Trump touting a $20B investment in AI data centers after Microsoft vowed $80B last Friday): Palantir Technologies -6.19%, Nvidia -5.31%, Super Micro Computer -2.47% while Broadcom declined 2.27%.
• On the positive side, Energy and Health Care sectors led gainers, oil and gas shares supporting Energy after crude prices drifted higher (WTI +0.61 at 74.17): Devon Energy +3.10%, Hess Corp +2.46%, Chevron +2.08%.