London Irvine Report: Special Update 03/01/2026 China v The USA? In The Pasta War, Did Italy Just Win?

Baltic Dry Index. 1882 +5 Brent Crude 60.75

Spot Gold 4342 Spot Silver 72.27

U S 2 Year Yield 3.47 unch.

US Federal Debt. 38.559 trillion US GDP 31.030 trillion

January 3, 1777. General George Washington's Revolutionary Army defeats British forces at the Battle of Princeton, New Jersey

In the stock casinos and most commodities, an indifferent start to 2926.

Next week’s action from silver to stocks to crude oil, will provide better guidance to 2026.

S&P 500 closes higher on first trading day of 2026 as chip stocks offer small boost to the market

Updated Fri, Jan 2 2026 4:19 PM EST

The S&P 500 closed slightly higher on Friday, the first trading day of 2026, as gains in semiconductor names kept the index afloat.

The benchmark closed up 0.19% at 6,858.47, while the Nasdaq Composite fell 0.03% to finish at 23,235.63. The two had been solidly positive earlier in the day, with the S&P 500 and the tech-heavy Nasdaq trading higher by 0.7% and 1.5% at their peaks, respectively. The Dow Jones Industrial Average moved up 319.10 points, or 0.66%, to settle at 48,382.39.

Friday’s gain marks a reversal from the first-day trading trend of the last few years. The S&P 500 finished lower on the first day of trading for each of the last three years. Going back to the 1950s, there is no discernible trend, with the first day finishing positive about 48% of the time, according to Bespoke Investment Group.

Key chip stocks such as Nvidia and Micron Technology climbed in the session. The former rose more than 1%, and the latter popped more than 10%. Both artificial intelligence-related names were big winners in 2025 — Nvidia jumped about 39%, while Micron surged more than 240%.

But other areas in tech outside of chips suffered some losses. Notably, software stocks came under pressure, as Salesforce dropped more than 4% and CrowdStrike declined more than 3%. Palantir Technologies and Microsoft pulled back as well.

Additionally, Tesla shares were more than 2% lower after the company’s fourth-quarter deliveries missed analyst estimates.

Tech was the best trade of 2025, leading the broader market to sharp gain as investors continued to pile into AI names. The S&P 500 gained more than 16% last year, marking its third straight annual advance. The Nasdaq jumped more than 20% last year, and the 30-stock Dow advanced around 13%. The three benchmarks hit record highs last year.

“We think that you will have this ongoing rotation back and forth between tech and non-tech, but that overall we’ll drift higher,” said Jay Hatfield, Infrastructure Capital Advisors CEO. Hatfield, who has an 8,000 year-end target for the S&P 500, said the rally will be “better balanced” as regional banks outperform and tech stocks with expensive valuations such as Tesla start to lag.

“There are themes besides tech that are very likely to work this year,” he continued.

Wall Street strategists expect more gains for the U.S. stock market in 2026. The CNBC Market Strategist Survey shows the average S&P 500 target for the year is 7,629, which implies upside of 11.4%.

Friday’s session had some bright spots elsewhere in the broader market. Shares of Wayfair jumped around 6%, while RH increased roughly 8% after President Donald Trump on New Year’s Eve postponed tariff increases on upholstered furniture, kitchen cabinets and vanities for a year. The order specifically delays a 30% duty on upholstered furniture and 50% levy on kitchen cabinets and vanities, keeping in place a 25% tariff on those goods that was imposed back in September.

Stock market news for Jan. 2, 2026

Oil prices edge lower after biggest annual loss since 2020

Published Thu, Jan 1 2026 9:32 PM EST Updated Fri, Jan 2 2026 2:54 PM EST

Oil prices edged lower on the first day of trade in 2026 after registering their biggest annual loss since ‍2020 as investors weighed ‍oversupply concerns against geopolitical ‍risks including the war in Ukraine and Venezuela exports.

Brent crude futures dropped 10 cents on Friday to close at $60.75 a barrel, while U.S. West Texas Intermediate crude also fell 10 ‌cents to settle at $57.32.

Russia and Ukraine traded allegations of attacks on civilians on New Year’s Day despite talks overseen by U.S. President Donald Trump that are aimed at bringing an end to the nearly four-year-old war.

Kyiv has been intensifying strikes against Russian energy infrastructure in ⁠recent months, aiming to cut off Moscow’s sources of financing for its military campaign in Ukraine.

Elsewhere, the Trump administration’s efforts to increase pressure on Venezuelan President Nicolas Maduro continued with Wednesday’s imposition of sanctions on four companies and associated oil tankers that it said were operating in Venezuela’s oil sector.

In the Middle East, a crisis between OPEC producers Saudi Arabia and the United Arab Emirates over Yemen has deepened after flights were halted at Aden’s airport on Thursday. This came before a virtual meeting between the OPEC+ group comprising the Organization of the Petroleum Exporting Countries and its allies on January 4.

Traders widely expect OPEC+ to continue its pause on output increases in the first quarter, said Sparta Commodities ‍analyst June Goh.

“2026 will be an important year on assessing OPEC+ decisions for balancing supply,” ‌she said, adding that China would continue to build crude stockpiles ⁠in the first half, providing a floor for oil prices.

2025 losses

The Brent and WTI benchmarks recorded annual losses of nearly 20% in 2025, ‍the steepest since 2020, as concerns about oversupply and tariffs outweighed geopolitical risks. It was the third straight year of losses for Brent, the longest such streak on record.

“As of now, we are expecting a fairly boring year for (Brent) oil prices, range-bound around $60-65 a barrel,” said DBS energy analyst Suvro Sarkar.

Oil prices edge lower after biggest annual loss since 2020

In the nasty pasta war, did Italy’s fagottini just beat Uncle Scam’s?

U.S. Slashes Proposed Tariffs on Italian Pasta

Exporters had feared they would have to pull out of the U.S. market

Jan. 1, 2026 2:51 pm ET

The U.S. has stepped back from imposing trade-killing duties on Italian pasta makers, meaning that Italian-made pasta will most likely continue to be available in U.S. stores.

Previously, the U.S. Commerce Department had said it would slap antidumping duties of 92% on Italy’s main pasta exporters as soon as January—a measure that Italian pasta makers said would force them to pull out of the U.S. market. Italy’s government and the affected companies have been lobbying the Trump administration for weeks to revise the decision.

The Commerce Department told the companies late on Wednesday that it would sharply reduce the antidumping measures, according to an industry representative and Italy’s foreign ministry. The two biggest pasta exporters to the U.S., La Molisana and Garofalo, will now face duties of 2.3% and 13.9%, respectively. Eleven other Italian pasta makers will face a 9.1% tariff.

“This is a great step forward. In Italy, we are finally working as a team,” said Cosimo Rummo, chief executive of Rummo Pasta, one of the affected companies.

In addition, the pasta companies are subject to the U.S.’s 15% tariff on imports from the European Union imposed last year by the Trump administration.

The antidumping review is continuing, and the department’s final report is due by March 11.

The department’s earlier decision in September shocked the Italian pasta industry, which has annual sales of around $770 million to the U.S. Defending pasta exports became a matter of national pride for the government of Italian Prime Minister Giorgia Meloni, which has sought to position itself as one of the Trump administration’s closest allies in Europe.

Some Italian officials and pasta executives suspected the protectionist policies of the White House might have influenced the severity of the preliminary decision. U.S. officials denied that, saying the proposed antidumping duties were set according to purely technical criteria.

The Commerce Department on Thursday said that its latest analysis “indicates that Italian pasta makers have addressed many of Commerce’s concerns raised in the preliminary determination, and reflects Commerce’s commitment to a fair, transparent process.”

U.S. Slashes Proposed Tariffs on Italian Pasta - WSJ

In other news.

China Signals It Won’t Give an Inch to the U.S. in Latin America

Beijing doubles down on its ambitions for the region just as Trump tries to assert dominance over the Western Hemisphere

Dec. 31, 2025 11:00 pm ET

China intends to keep playing in the U.S. backyard, Latin America.

The Trump administration took veiled swipes at China in its national-security strategy with the vow to “restore American pre-eminence in the Western Hemisphere” and “deny non-Hemispheric competitors.”

Less than a week after the release of the U.S. strategy in December, Beijing issued a little-noticed policy paper on Latin America and the Caribbean that geopolitical analysts say foreshadows more U.S.-China jostling for regional influence.

“China has always stood in solidarity through thick and thin with the Global South, including Latin America and the Caribbean,” said the 6,700-word policy paper, China’s first on the region in almost a decade. The paper cites how a “significant shift is taking place in the international balance of power,” terminology Chinese leader Xi Jinping uses to allege that the era of U.S. global supremacy is ending.

China shadows each major challenge President Trump has taken on in Latin America, from degrading the Venezuelan regime to reasserting American dominance at the Panama Canal. It is a counterpoint—albeit a moderate one—to what Beijing considers encirclement of its territory by the U.S. system of military alliances throughout Asia.

“Great power competition in the region has only just begun,” according to an analysis of China’s Latin American stance by the Center for Strategic and International Studies.

The Washington-based think tank said Beijing’s policy plan demonstrated its intention to expand diplomatic and economic ties in Latin America, and position itself as an alternative to the U.S. China is gaining political leverage in the region by spending money on infrastructure projects and extracting critical minerals, energy and other natural resources. This is done while its diplomats engage local political power brokers via its embassies.

Beijing now claims 24 signatories in the region to its Belt and Road Initiative, compared with none before 2017. It has also displaced the U.S. as the biggest trading partner with many Latin American countries. “China’s strategy is basically not giving an inch,” said Ryan Berg, a co-author of the CSIS analysis.

Trump’s muscle-flexing at the Venezuelan regime of Nicolás Maduro is providing an early test of China’s priorities and its claim that it has an “all-weather strategic partnership” with the country. Beijing has denounced as illegal hegemony and “unilateral bullying” the U.S. military buildup around Venezuela, including the interception of oil tankers that are allegedly part of a sanctions-busting ghost fleet that also transports oil to China.

China Signals It Won’t Give an Inch to the U.S. in Latin America - WSJ

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

Hmmm?

US health insurance costs to rise by 114% for millions as subsidies expire

More than 20 million people in the United States will face sharply higher health insurance costs as of January 1 after enhanced tax credits that helped enrollees in the Affordable Care Act afford coverage expired overnight. The expiration of the subsidies will mostly affect families, small business owners and self-employed workers.

Issued on: 01/01/2026 - 18:11

Enhanced tax credits that have helped reduce the cost of health insurance for the vast majority of Affordable Care Act (ACA, also known as "Obamacare") enrollees expired overnight, cementing higher health costs for millions of people in the United States at the start of the new year.

The change affects a diverse cross-section of the population who don’t get their health insurance from an employer and don’t qualify for Medicaid or Medicare – a group that includes many self-employed workers, small business owners, farmers and ranchers.

On average, the more than 20 million subsidised enrollees in the Affordable Care Act programme are seeing their premium costs rise by 114 percent in 2026, according to an analysis by the healthcare research nonprofit KFF.

The subsidies were first given to Affordable Care Act enrollees in 2021 as a temporary measure to help US residents get through the Covid-19 pandemic. Democrats in power at the time then extended them, pushing the expiration date to the start of 2026. Some lower-income enrollees received health care with no premiums, and high earners paid no more than 8.5 percent of their income. Eligibility for middle-class earners was also expanded.

Democrats forced a 43-day government shutdown over the issue, demanding the health subsidies be extended before they agreed to a new Republican budget. Some Republicans also called for a bipartisan solution to save their 2026 political aspirations, given the ACA's popularity – two-thirds of Americans favour the system, according to KFF.

But while congressional Republicans acknowledged the issue needed to be addressed, they refused to put it to a vote until late in the year. A House vote expected in January could offer another chance, but success is far from guaranteed.

Health analysts have predicted the expiration of the subsidies will drive many of the 24 million total Affordable Care Act enrollees – especially younger and healthier Americans – to forgo health insurance coverage altogether.

Over time, that could make the programme more expensive for the older, sicker population that remains.

Rising costs across the board

The surging healthcare prices come alongside an overall increase in health costs in the US, which are further driving up out-of-pocket costs in many plans.

It also comes at the start of a high-stakes midterm election year, with affordability – including the cost of health care – topping the list of voters’ concerns.

“It really bothers me that the middle class has moved from a squeeze to a full suffocation, and they continue to just pile on and leave it up to us,” said 37-year-old single mom Katelin Provost, whose healthcare costs are set to jump. “I’m incredibly disappointed that there hasn’t been more action.”

Some enrollees, like Salt Lake City freelance filmmaker and adjunct professor Stan Clawson, have absorbed the extra expense. Clawson said he was paying just under $350 a month for his premiums last year, a number that will jump to nearly $500 a month this year. It’s a strain for the 49-year-old, but one he’s willing to take on because he needs health insurance as someone who lives with paralysis from a spinal cord injury.

Others, like Provost, are dealing with steeper hikes. The social worker’s monthly premium payment is increasing from $85 a month to nearly $750.

US health insurance costs to rise by 114% for millions as subsidies expire - France 24

Student loan forgiveness is taxable again: Start planning for the ‘tax bomb,’ CFP says

Published Thu, Jan 1 2026 10:10 AM EST

Student loan borrowers whose debt is canceled in 2026 or later may face a significant tax bill.

A law that shielded student loan forgiveness from taxation at the federal level — part of the American Rescue Plan Act of 2021 — expired on Dec. 31, 2025. President Donald Trump’s “big beautiful bill” did not extend or make permanent that provision.

As a result, certain borrowers who’ve recently received education debt cancellation or expect to do so in the future should take steps as soon as possible to be prepared, experts say.

The taxation change applies to the Department of Education’s income-driven repayment plans, or IDRs. Enacted in the 90s, IDR plans cap people’s monthly payments at a share of their discretionary income and excuse any remaining debt after a certain period, typically 20 or 25 years.

“A lot of people are very close to their 20- or 25-year mark,” said Ethan Miller, a certified financial planner and founder of Planning for Progress in the Washington area. Miller specializes in student loans.

“Those are the folks who really need to be thinking about how the so-called tax bomb ... is going to impact them,” he said.

Public Service Loan Forgiveness, a program for government and nonprofit employees that eliminates federal loans after 120 qualifying monthly payments, remains tax-free.

The federal tax bill on student loan forgiveness could be substantial. The average loan balance for borrowers enrolled in an IDR plan is around $57,000, said higher education expert Mark Kantrowitz.

For those in the 22% tax bracket, having that amount forgiven would trigger a tax burden of more than $12,000, Kantrowitz estimated. Lower earners, or those in the 12% tax bracket, would still owe around $7,000.

Plus, some borrowers could incur state tax liability on their forgiven balance, experts say.

More than 42 million Americans hold student loans, and the outstanding debt exceeds $1.6 trillion.

Student loan forgiveness is taxable again: How to prepare

Technology Update.

With events happening fast in the development of solar power and graphene, I’ve added this section.

A 30-Year Superconductivity Mystery Just Took a Sharp Turn

December 31, 2025

New research sharpens understanding of the hidden symmetry in a mysterious superconductor.

Superconductors are materials that allow electrical current to flow without any resistance, a property that typically appears only at extremely low temperatures. While most known superconductors follow established theoretical frameworks, strontium ruthenate, Sr₂RuO₄, has remained difficult to explain since researchers first identified its superconducting behavior in 1994.

The material is widely regarded as one of the purest and most thoroughly examined examples of unconventional superconductivity. Even so, scientists have not reached agreement on the exact nature of the electron pairing within Sr₂RuO₄, including its symmetry and internal structure, which are central to understanding how its superconductivity arises.

Probing Superconductivity Through Strain

One effective way to uncover the character of a superconducting state is to observe how the temperature at which superconductivity begins, known as T_c, shifts when mechanical strain is applied. Stretching, squeezing, or twisting a crystal can reveal important differences because distinct superconducting states respond to these distortions in unique ways.

Earlier investigations, particularly those using ultrasound techniques, pointed to the possibility that Sr₂RuO₄ supports a two-component superconducting state. This more intricate form of superconductivity could allow unusual effects, including internal magnetic fields or the presence of multiple superconducting regions within the same material. A defining feature of a true two-component state, however, is a strong sensitivity to shear strain.

A New Approach Using Shear Strain

This inspired a team of researchers from Kyoto University to use strain to understand the true nature of the superconducting state of Sr₂RuO₄. The researchers developed a technique that allowed them to apply three distinct kinds of shear strain to extremely thin Sr₂RuO₄ crystals. Shear strain is a type of distortion that shifts part of the crystal sideways, similar to sliding the top of a deck of cards relative to the bottom.

The strain levels were carefully measured using high-resolution optical imaging down to 30 degrees K (−243 degrees C). The key discovery: the superconducting temperature hardly changed at all. Any shift in T_c was smaller than 10 millikelvin per percent strain, effectively below the detection limit.

These results show that shear strain has virtually no effect on the temperature at which Sr₂RuO₄ becomes superconducting, ruling out several proposed theories and setting strict limits on what kinds of superconducting states are still possible. The findings instead point toward a one-component superconducting state, or perhaps even more unusual, still-unexplored superconducting states that behave differently from conventional theoretical expectations.

“Our study represents a major step toward solving one of the longest-standing mysteries in condensed-matter physics,” says first author Giordano Mattoni, Toyota Riken – Kyoto University Research Center.

An Ongoing Mystery and Broader Impact

This study tightens the search for the correct explanation of how superconductivity occurs in this compound. Yet a puzzle remains: earlier ultrasound measurements clearly showed a strong effect linked to shear, while the new direct strain measurements do not. Understanding why these two methods disagree is now a major open question.

Beyond Sr₂RuO₄, the strain-control technique developed in this study can be applied to other superconductors that exhibit multi-component behavior, such as UPt₃, as well as other materials with intricate phase transitions.

Reference: “Direct evidence for the absence of coupling between shear strain and superconductivity in Sr2RuO4” by Giordano Mattoni, Thomas Johnson, Atsutoshi Ikeda, Shubhankar Paul, Jake Bobowski, Manfred Sigrist and Yoshiteru Maeno, 16 December 2025, Nature Communications.
DOI: 10.1038/s41467-025-67307-1

Funding: Japan Society for the Promotion of Science

A 30-Year Superconductivity Mystery Just Took a Sharp Turn

Next, the world global debt clock. Nations debts to GDP compared.

World Debt Clocks (usdebtclock.org)

Exponent Calculator

Enter values into any two of the input fields to solve for the third.

Exponent Calculator

This weekend’s music diversion, J. S. Bach showing off again. Approx. 9 minutes.

Alison Balsom joue Bach (Concerto en ré majeur).wmv

Alison Balsom joue Bach (Concerto en ré majeur).wmv - YouTube

Next, shipping news. Approx. 13 minutes.

Is the Red Sea Reopening? | Why Is the EU Escorting but Not the US Navy? | Disruptions Expected