Credit Calm Deepens

U.S. investment-grade bond spreads hit their lowest level in 30 years.

January 23, 2026

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🎯 In this issue:

  • Banana Bits: Solid data and easing global tension sent equities higher

  • What’s Ripe / Rotten: The tastiest and most disgusting stocks today

  • Technical Trip: Interview Q&A from Evercore Restructuring

  • Lesson from the Library: Private Equity course sneak peek

  • Student Spotlight: A+ equity research report

  • Deal Deep Dive: M&A, IPO, and transaction breakdowns

Market Snapshot

📉 Banana Bits

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Market Recap

Solid Data and Easing Global Tension Sent Equities Higher

This week has been a bumpy ride for investors navigating markets amid increased tensions between the U.S. and the EU, which sent equities into a downward trend. 

Fortunately, the markets saw a reverse towards this trend after the Greenland framework deal. The good news is also supported by a resilient U.S. economy, which expanded in the third quarter by slightly more than initially reported, driven by stronger exports and a smaller drag from inventories.

Initial jobless claims steadied at 200,000 last week, and personal spending rose at a solid pace in November, underscoring consumer resilience

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The Fed’s preferred inflation metric, core PCE, is a two-edged sword: a 2.8% reading is in line with expectations but still far from the Fed’s target of 2%.

Still, markets reacted optimistically, with the S&P 500 rose 0.55%. A gauge of the “Magnificent Seven” shares climbed 2.1%. 

The Russell 2000 index of small firms hit a record high. A measure of stock volatility — the VIX — tumbled to below 16. The yield on 10-year Treasuries was little changed at 4.25%. The dollar lost 0.3%, and gold reached an all-time high.

What's Ripe

Arista Networks Inc. (ANET) 8.7%

  • ANET jumped 8.7% to become the best-performing S&P 500 stock on Thursday.

  • The catalyst for the big move wasn’t immediately clear, but analysts noted increasing buy-side interest in the company due to its exposure to artificial-intelligence backend networking.

GameStop Corp. (GME) 6.7%

  • GME climbed 6.7%. Chairman Ryan Cohen bought 500,000 shares in the videogame retailer on Wednesday, according to a filing with the Securities and Exchange Commission, bringing his stake to more than 42 million shares

  • Cohen purchased the same amount of stock on Tuesday.

What's Rotten

Abbott Laboratories (ABT) 10.0%

  • ABT sank 10%. The medical devices maker reported fourth-quarter adjusted earnings that topped analysts’ estimates by a penny, but sales missed forecasts.

  • Abbott’s nutrition segment, which includes infant formula and meal supplements, has continued to struggle.

McCormick & Co. Inc. (MKC) 8.1%

  • MKC tumbled 8.1%. The world’s largest spice maker missed quarterly earnings expectations and issued mixed guidance for fiscal 2026.

🧠 Technical Trip

Interview Q&A from Rothschild & Co

👉 Want 1-on-1 recruiting help from Rothschild & Co bankers & 2,000+ top mentors? Apply to WSO Academy

🌟 Student Spotlight

A+ Equity Research Report 📊

Looking for a stellar example of what makes an equity research report stand out?

One of our WSO Academy students, Justin Kylle Ching, put together an impressive deep dive on Target Corporation, covering valuation, catalysts, and key risks with the kind of insight that turns good pitches into great ones.

🦈 Deal Dispatch

M&A, IPOs, And Other Notable Transactions

Banana Brain Teaser

Previous

Lloyd normally works 7.5 hours per day and earns $4.50 per hour. For each hour he works in excess of 7.5 hours on a given day, he is paid 1.5 times his regular rate. If Lloyd works 10.5 hours on a given day, how much does he earn for that day?

Answer: $54.00

Today

One hour after Yolanda started walking from X to Y, a distance of 45 miles, Bob started walking along the same road from Y to X. If Yolanda’s walking rate was 3 miles per hour and Bob’s was 4 miles per hour, how many miles had Bob walked when they met?

❝

Buy when everyone else is selling and hold when everyone else is buying. This is not merely a catchy slogan. It is the very essence of successful investments.

Jean Paul Getty

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Happy Investing,
Chris, Vyom, Ankit, Mitchell, Fernanda, & Patrick