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Liquidity Floods Markets as Inflation Cools and AI Spending Accelerates

Market Movers: The Opening Bell

January 14, 2026

Video Transcript

Let's get to the big story breakdown while inflation ended 2025 relatively tame, giving the Federal Reserve some breathing room as that balances stubborn price pressures against a cooling job market.

Now consumer prices rose 2.7% in the latest month from a year earlier, in line with expectations and also suggesting the impact of tariffs remains limited for now.

But for now that eases pressure on Fed officials who cut rates last month and are signaling.

Pause ahead even as high prices and a slowing labor market continued to weigh on American households while we are halfway through the month nearly and geopolitics and politics are also dominating headlines.

So joining me to separate signal from noise here at the New York Stock Exchange is Luke Lloyd, president and CEO of Lloyd Financial Group.

Hey, great to have you here.

Thank you so much for joining me.

Like you said, there's never a dull moment, right?

So why not be at the heart of where money. in the New York Stock Exchange, absolutely my pleasure.

Well, we have to keep in mind that the S&P Dow is seeing new record highs this year, but there's a lot of noise, a lot of headlines.

So when it comes to the US economy, where do you stand right now on growth, inflation, as well as liquidity?

Yes, those are the three metrics we track every single morning.

All of those still look really good.

Growth looks good.

Inflation is still coming down.

We'll talk about PPI here in a second, but Liquidity is still very strong with government spending and corporation spending on AI and all the money flowing into the economy.

I think $8 trillion in money market accounts.

The fact that private credit is doing very well, I think the big banks yesterday talked about how their investment banking sector and credit sector wasn't doing as good.

I think private credit has actually taken some money out of the big banks and all these private corporations are making more money.

So a lot of money is flowing throughout the economy, and that's a good thing when it comes to.

PPI, it's very interesting.

You can't trust some of this data though because it's 45 days.

The government shut down 43 days roughly.

A lot of this data is old and the data wasn't collected for a 43 day period.

So what can you trust now?

There's a couple of philosophies here.

There's a possibility that PPI came in higher than CPI because possibly corporations are absorbing some of the costs.

We'll figure that out here in the next few months as we get some more of that economic data, but at the end of the day with AI.

Coming throughout the economy, competition.

AI inherently is disinflationary and technology inherently is disinflationary.

Deregulation is disinflationary.

So even though the liquidity is strong, growth is strong, that could be, but people would say that's inflationary.

It's been offset by a lot of the other things also talking about credit card caps and all the other things.

Those are actually deflationary as well because it's actually slowing economic growth.

If those things were to happen, so there's so many things going on, it's like.

Have a war going on of all these different data points of some things that are inflationary, some things that are disinflationary.

Yes, and you bring up an important point because there are so many headlines coming through and at the end of the day we're keeping a close eye on price action here on Wall Street.

So how are you separating the signal from all the noise out there?

Yes, that's a great question.

So at the end of the day, macro data matters and we that again every single morning.

As long as those three metrics remain strong, we are right now a higher beta in our portfolio.

We are taking on more risk because everything suggests right now to take on more risk in the portfolio as that wealth separation happens that we talk about a lot where you know right now if you look at corporate margins, they're the second highest it's ever been in history, 10.9% margins right now, which again second highest, large numbers corporations are making a lot of money.

You look at GDP, only 53%.

Of GDP salaries and wages, that's money in people's pocketbooks.

Only 53% of GDP comes from that.

That's the lowest since 1949.

So the point is there corporations are making more money.

The little guy at home sadly is still struggling.

That's why even though you've seen the stock market at all time highs, 401ks at all-time highs, the little guy at home is still complaining about grocery prices and they don't feel good, right?

But that's all separation is happening.

The only way for you.

Partake is owning stocks.

That's why we've gotten more risky in the portfolio with owning stocks like Coreweave that is a very high beta name, kind of high growth name that could go up 5% down 5% in a day.

But they're training AI models and as liquidity remains strong, whether the business actually core business does well, those higher beta names speculation should rise with liquidity back on the table and that wealth separation happening and corporate margins remaining pretty high.

Yes, and Luke, I'm sure there are viewers out there in the audience watching right now, and they might be looking at Wall Street at all-time highs, but saying prices are rising for them, and there are questions about the housing market as well as labor market as we head into this year.

So first, because you mentioned private credit, what do you make of what's happening in terms of competition and what are the takeaways from the big bank earnings?

So one of the core things for next year is coming from the big beautiful bill, the tax kind of situation.

A lot of. are using their bonus depreciation 100% bonus depreciation.

There's a lot of things that are helping the small business owners.

If you're a small business owner or a large business owner, your wealth is tied to the success of the business.

So a lot of people that maybe aren't in business think that all these corporations with the tax cuts are going to put more money in their pocketbooks.

That's not the case.

That's not how it works.

You want to grow the business, maybe you're not paying yourself initially, but if your stock price goes up or your revenue goes up because you're hiring more people to grow it, you're actually your wealth is increasing.

That's how. works.

So my point is with that is I think a lot of these corporations are going to be investing in personal capital, you know, personnel, software, and that's going to go into more pocketbooks.

So when it comes to housing, what we'd like to see happen is housing stabilize.

You know, all these kind of inflationary pressures stabilize, but wages increase.

I think that's what's going to happen next year.

You're going to see more wage growth than you've seen in a very long time, more money in people's pocketbooks.

But again, does 4.5%, maybe 4% wage growth compared to 2.5% inflation really make a difference?

1.5%. overinflation, you're not going to feel it greatly at home, but that growth is something we haven't seen in a long time.

I think that's very bullish.

Now we do have to look international, you know, one of the core focuses for me is Latin America right now.

You know, a lot of things are going on in Venezuela, defense, I think there's breaking news this morning about Qatar.

Trump announcing something over there.

Defense is an area we're invested in.

One of the stocks that's been our best performance this year, it's up 50% this year already, is AV's drone technology, and the government's already said they're pumping like $33 billion.

Dollars into drone technology and new contracts.

So that's an area we're focusing on specifically in Latin America with emerging markets.

There's that mean reversion going on as the capital markets in the United States is pretty expensive.

There's other areas that need to catch up.

So stocks like MELI or one of our best performers last year, CIB Group of Sebesto, which is a Bank of Colombia, kind of regrouped or redid their name a few few years ago, but I think that continues to be a strong suit as emerging markets.

To catch up.

MLs, Amazon in Latin America.

So these are other areas than just US markets that you can make a lot of money on with liquidity remaining strong globally, not just here in the US, so you told us a little bit about opportunities and some names that you're watching south of the border, but when we look at US markets, we can't deny the fact that the Dow, Nasdaq, S&P 500 had the 3rd straight year of double-digit percentage gains.

So what are opportunities you're watching here in the US?

Great question.

So last year, I think I was a little early.

Last year we still did very well last year, don't get me wrong, but I thought it wasn't going to be as much Max 7.

It was going to be more bottom 493 and more equal weight S&P.

It was more Max 7 the first half of last year.

The equal weight and other stuff caught up towards the second half.

I think this year is truly going to be the 2nd, 3rd derivatives of AI.

It's not going to be the Microsoft, Apple, Amazon.

We own Google and Microsoft.

Those are the only two stocks we own in the Max 7.

We don't touch anything else.

Google was one of our other good performers last year with their AI demand and chip making, but the 2nd and 3rd derivatives like Accenture, ACN, you know, other kind of areas like I mentioned core weave could be a stock.

We're taking a look at all these different areas within AI.

I think those are where you need to focus on.

The 2nd, 3rd derivatives, not just the Nvidia palanters of the world.

I think all that money needs to flow out.

That's why the equal weight is up 3% this year and the S&P is up, I think 1.5% already.

So you're already seeing the outperformance and that breadth widen.

I think that's going to continue to happen.

Well, Luke, a lot of moving parts here.

So thank you so much for breaking it all down for us.

I appreciate your time and thank you so much for all your insights.

Always fun being here.

Thank you so much.

The economic landscape in the United States has been evolving rapidly, especially as we approach the end of 2025. Recent trends show a significant but controlled rise in consumer prices, which increased by 2.7% compared to the previous year. This figure aligns with expectations, indicating that the impact of tariffs remains limited for the time being. The Federal Reserve has succeeded in easing some of its tight monetary policies after cutting rates last month and is likely to maintain a pause on rate changes amidst ongoing concerns regarding inflation and a cooling labor market.

To gain deeper insights into current economic metrics like growth, inflation, and liquidity, we welcomed Luke Lloyd, the president and CEO of Lloyd Financial Group, to discuss these developments live from the New York Stock Exchange. His expertise casts light on the balance of power between financial metrics and market perceptions amid the various economic pressures we are experiencing.

Lloyd highlighted that growth indicators remain robust, inflation is trending downwards, and liquidity is still overflowing within the economy, primarily due to significant government and corporate spending, especially in artificial intelligence (AI) sectors. In fact, estimates reveal around $8 trillion languishing in money market accounts, while private credit has gained traction at the expense of bigger banks’ margins. This influx of capital denotes a healthy cash flow across the economy, a promising sign for both investors and consumers alike.

Despite the upbeat metrics, Lloyd cautioned that one should not take government data at face value, given certain inconsistencies resulting from a recent 43-day government shutdown. The impacts of Producer Price Index (PPI) trends may not be entirely reliable, suggesting that corporations might be absorbing costs that could lead to inflationary pressures. However, he emphasized that technological advancements and deregulation tend to have disinflationary effects in the long run. This intricate interplay between various economic forces creates a complex picture for investors and households alike.

In the current investment climate, Lloyd mentioned the importance of separating genuine signals from volatile noise. Despite record-high stock market performance—which may feel alien to everyday citizens grappling with rising grocery prices—Lloyd reaffirmed a bullish stance on equities, advocating for higher beta investments. With various sectors benefiting from liquidity, he noted that corporate earnings are solid, even while wages for the average worker lag behind.

As we anticipate changes in the housing market and labor landscape, Lloyd foresees improvements in wage growth and stability in housing prices over the next year. This robust economic progression, if aligned with continued wage growth, could ultimately bring more money into consumer pockets, albeit modestly at first.

Outside the U.S., Lloyd is particularly focused on investing in Latin America, a region ripe with potential given its emerging markets. Specific sectors like drone technology are receiving substantial government contracts, and companies such as Grupo Cibest in Colombia show promise. The valuation differences between U.S. markets and emerging economies create fertile ground for opportunities that savvy investors should consider.

While navigating the complex U.S. market, it is essential to identify companies poised for growth. Lloyd pointed out that investment opportunities may lie in the second and third derivatives of AI, emphasizing that there are more promising plays beyond the typical tech giants like Microsoft and Amazon. He recommends focusing on companies that supply services and technologies that support AI advancement, such as Accenture and CoreWeave.

In summary, the economic climate remains precarious yet promising, offering a wealth of opportunities for investors who are knowledgeable and willing to engage with the signals provided by the market trends. As we enter 2026, the stage is set for evolving dynamics between growth, liquidity, and inflation, bringing both challenges and rich possibilities to the forefront.

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