The 4Sight Weekly Report – Week of January 12, 2026
January 12, 2026

The 4Sight Weekly Report

Macro + credit lens for disciplined investors. This week marks the first full data reset of 2026, as inflation prints, retail sales, and bank earnings return after holiday and shutdown distortions.

Theme of the Week — “Data Comes Back Online”

Markets enter the first full macro week of 2026 with assumptions built during low-liquidity holiday trading finally facing verification. Inflation data, consumer demand, and early bank earnings will test whether late-2025 optimism was grounded in fundamentals or simply a function of thin markets and delayed releases.

Macro Brief

  • Inflation: December CPI and PPI are the first major inflation reads of the year. Consensus expectations point to headline CPI around 2.7% year-over-year and core near 2.6%, suggesting continued cooling but still above the Fed’s target. Services inflation and shelter remain the critical swing factors for policy direction.
  • Policy backdrop: Federal Reserve officials have emphasized patience, noting that policy is “well positioned” amid slowing labor demand and moderating inflation. Markets are no longer pricing aggressive near-term easing, shifting attention to how long restrictive real rates persist into 2026.
  • Labor signal: Recent job openings and hiring data show cooling momentum, particularly among smaller employers. While unemployment remains contained, labor — rather than inflation — is increasingly viewed as the binding constraint for growth this year.

Consumer & Growth Check

This week’s retail sales report provides a critical read on post-holiday consumer health. Elevated borrowing costs, persistent living-cost pressures, and slowing real income growth raise the risk that consumer resilience weakens as 2026 begins. Markets will be watching for evidence that demand is normalizing rather than abruptly rolling over.

Earnings: The Credit Lens

Large U.S. banks kick off earnings season this week, and investor focus is firmly on credit quality rather than revenue growth. Commentary on loan-loss provisions, deposit costs, and commercial real estate exposure will shape expectations for credit availability across the broader economy.

Credit Markets

Credit spreads remain relatively tight entering the year, but tone is shifting from price-driven to structure-driven decision-making. Refinancing activity is picking up after year-end pauses, and lenders are increasingly differentiating between senior, well-documented credits and leveraged, covenant-light structures.

In private credit, ratings agencies and sell-side research continue to flag structural risk — including leverage, documentation erosion, and payment-in-kind features — as the primary vulnerability if growth slows further. Dispersion between high-quality credits and speculative structures is expected to widen as real data replaces holiday assumptions.

What It Means Right Now

  • Expect repricing, not confirmation: January data may challenge narratives formed during thin holiday trading.
  • Watch bank language closely: Credit commentary often leads broader economic indicators at turning points.
  • Quality first: Senior, well-documented exposure with durable cash flows and liquidity flexibility matters more than chasing early-year momentum.

Quote of the Week

“When the data returns, so does differentiation.”

References

  1. Reuters — U.S. CPI and PPI previews; Wall Street Week Ahead (January 2026)
  2. Financial Times — U.S. inflation and policy outlook coverage
  3. Bloomberg — Core CPI and services inflation analysis
  4. AP News — December inflation and consumer impact reporting
  5. S&P Global Market Intelligence — Week Ahead Economic Preview (Jan 12, 2026)
  6. Wall Street Journal — Bank earnings and credit quality coverage