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Inflation Showdown: Tech Earnings Under Pressure · The SPY Trader

• 0:00
  Welcome back to Spy Trader !
• 0:02
  I'm your host , Barry Cashflow , ready to break down a condensed , highstakes week .
• 0:07
  It is 5 am on Sunday , January 18th , 2026 , Pacific time .
• 0:13
  We are entering a crucial period characterized by increased volatility and a pivotal test of the market’s ongoing rotation trade .
• 0:21
  Let’s dive right in .
• 0:22
  The market is closed on Monday for the holiday , condensing all the action into four highly charged trading days .
• 0:30
  The key events driving volatility this week are twofold : major inflation data and highprofile tech earnings .
• 0:37
  First , mark your calendar for Thursday , January 22nd .
• 0:41
  That is when the Core Personal Consumption Expenditures Price Index , or PCE , hits the wire .
• 0:48
  This is the Federal Reserve's preferred measure of inflation .
• 0:51
  A higherthanexpected reading will reinforce the recent rise in Treasury yields and could pressure overall stock valuations , especially for highgrowth tech names .
• 1:02
  On the corporate side , the tech sector takes center stage .
• 1:06
  We are looking at results from Netflix ( NFLX ) on Tuesday , and Intel ( INTC ) on Thursday .
• 1:13
  These reports will be critical in dictating whether the Nasdaq can shake off its recent underperformance .
• 1:18
  Our overall outlook for the S&P 500 ( SPY ) is neutral to slightly bearish .
• 1:24
  The index is likely to pause after hitting recent highs as investors wait nervously for that Core PCE data .
• 1:32
  The primary theme driving stock action remains the “ rotation trade”—the shift of capital out of megacap technology and into cyclical and valueoriented sectors .
• 1:43
  This means the techheavy Nasdaq 100 ( QQQ ) faces twin pressures this week from rising yields and those critical earnings reports .
• 1:52
  Conversely , the rotation is favoring smallcaps .
• 1:55
  The Russell 2000 ( IWM ) has seen strong gains and technically remains robust .
• 2:03
  We see this rotation playing out clearly in our sector analysis .
• 2:07
  The Basic Materials ( XLB ) and Industrials ( XLI ) sectors have been market leaders , up significantly yeartodate , confirming that investors are shifting toward cyclicals .
• 2:18
  Now for our concrete investment recommendations heading into this volatile week .
• 2:22
  First , for stability , maintain your core broad market holdings in an ETF like the Vanguard S&P 500 ETF ( VOO ) to mitigate singlestock risks .
• 2:34
  Second , to capitalize on the ongoing rotation theme , overweight cyclicals .
• 2:39
  Purchase the Industrial Select Sector SPDR Fund ( XLI ) to gain exposure to that strength .
• 2:46
  We also favor the defensivegrowth appeal of Health Care ( XLV ) .
• 2:50
  Specifically , Johnson & Johnson ( JNJ ) reports on Wednesday and is expected to show outsized sales growth , making the Health Care Select Sector SPDR Fund ( XLV ) a prudent holding .
• 3:04
  Third , given the high sensitivity to that PCE inflation number , consider a small , tactical hedge .
• 3:11
  A small allocation to longduration bonds , using the iShares 20 Year Treasury Bond ETF ( TLT ) , can serve as a cushion against unexpected economic weakness or a sudden drop in yields if the inflation news is benign .
• 3:27
  Finally , for the Technology sector , we recommend a waitandsee approach .
• 3:32
  If you are betting on a strong rebound driven by positive earnings from Netflix and Intel , the Technology Select Sector SPDR Fund ( XLK ) is the instrument to use , but proceed with heightened caution this week .
• 3:46
  That’s all the time we have for this edition of Spy Trader .
• 3:50
  Trade smart , trade safe , and let’s manage this volatility together .
• 3:55
  We’ll talk soon !