Good morning investors,
Trump's capture of Venezuelan President Maduro sends energy stocks soaring with Chevron up 7% and SLB jumping 9.6% as markets bet on rebuilding the world's largest oil reserves. TSMC hits record highs surging 6.9% after Goldman raises price target 35% to NT$2,330. Bitcoin breaks above $93,000 and its 50 day moving average for the first time since October's crash, with $20 billion in options expiry last week potentially removing price suppression. Foxconn's 22% Q4 revenue surge beating estimates confirms AI infrastructure spending remains robust heading into 2026.
Opening Bell: Venezuela Transforms Energy
S&P ($SPY ( ▲ 0.07% )) futures up 0.3%, Nasdaq ($QQQ ( ▲ 0.21% )) futures gain 0.7%, and Dow ($DIA ( ▲ 0.12% )) futures rise 48 points as markets digest the Venezuela intervention's implications. Energy sector explodes with XLE up 4.7% premarket on prospects of accessing 303 billion barrels of proven reserves - 17% of global supply.
Chevron ($CVX ( ▲ 0.74% )) leads at 7.2% given existing Venezuelan presence, while Exxon gains 4.7% and ConocoPhillips jumps 7.2%. Oilfield services see even larger moves with Halliburton and SLB both up 9.6% on infrastructure rebuild expectations.
Venezuela's Oil Bonanza
Trump declaring the US will "run Venezuela until safe, proper and judicious transition" transforms energy dynamics overnight. His plan to deploy America's largest oil companies to "spend billions of dollars, fix the badly broken infrastructure" and "start making money for the country."
The challenges remain immense. Neil Atkinson, former PDVSA employee, notes Venezuela lacks law and order, stable electricity, and reliable food/fuel supplies. "A lot has to happen and it cannot happen without the consent of the Venezuelan people." Per CNBC. Yet with oil at $60, this represents a long-term strategic play worth the complexity.
TSMC's AI Validation
One of my top picks for 2026, TSMC ($TSM ( ▼ 0.47% )), is touching fresh records after a bullish call from Goldman Sachs. Goldman's Bruce Lu calling AI "a multi-year growth engine for TSMC" while projecting $150 billion in capacity spending over three years shows conviction despite stretched valuations.
The Taiwan market breaking 30,000, a level deputy finance minister Juan Ching-hwa called "almost impossible" recently, reflects global capital chasing AI exposure. TSMC's 44% gain in 2025 pushing market cap above $1 trillion proves its irreplaceable position in the semiconductor supply chain.
Samsung extending gains to five straight sessions ahead of preliminary results this week adds confirmation. Japanese equipment makers Tokyo Electron and Advantest advancing 7% each shows the entire ecosystem participating.
Bitcoin's Technical Breakout
Bitcoin ($BTC ( ▼ 0.75% )) reclaiming $93,000 and its 50 day moving average marks a critical technical recovery. The $20 billion options expiry last week likely explains recent price suppression, with that overhang removed, the path to $100,000 reopens. Year to date gains of 6% already suggest momentum building.
Coinbase ($COIN ( ▲ 16.47% )), my other top 2026 pick, benefits directly from crypto's recovery. The company's December announcements of stock trading integration and Kalshi partnership for prediction markets transform it into an all in one financial platform. India's approval of Coinbase's CoinDCX stake opens the world's fastest growing crypto market. My $300 price target looks increasingly achievable, potentially this month.
Foxconn's AI Reality Check
Foxconn beating Q4 estimates with NT$2.6 trillion revenue versus NT$2.4 trillion expected provides crucial confirmation that AI spending continues despite bubble fears. The 22% revenue surge driven by components and cloud businesses shows real orders, not speculation.
Their partnerships with OpenAI on next-gen hardware and Nvidia/Taiwan government on AI factories position them perfectly for continued growth. Management expecting earnings near five year highs despite Q1's "traditional off-season" suggests sustained momentum.
Jobs Week Preview
Friday's December payrolls expecting just 55,000 jobs added versus November's 64,000 sets up potential disappointment. The unemployment rate forecast to fall to 4.5% from 4.6% seems optimistic given hiring weakness. ADP Wednesday and weekly claims Thursday provide early reads.
With 85% odds of Fed holding rates in January, only shocking weakness would shift expectations. The real focus: Trump's imminent announcement of Powell's replacement, promised for early January. The choice between Hassett and Warsh determines 2026's monetary trajectory.
Market Resilience Continues
2025's 16% S&P gain despite April's bear market demonstrates remarkable durability. Google up 60% and Nvidia gaining 30% as the only Mag 7 members beating the index shows selective leadership rather than broad speculation.
The question for 2026: can AI momentum continue as leadership broadens? Early signs suggest yes, with semiconductors soaring while defensive names lag, exactly what healthy bull markets display.
Final Thought
Trump's Venezuela gambit represents the kind of bold, market friendly action investors crave. Unlocking 303 billion barrels of oil reserves while crushing a narco-terrorist regime combines strategic and economic wins. Energy stocks exploding on infrastructure rebuild potential shows markets immediately grasp the opportunity.
Geopolitical shock typically drives risk-off positioning, yet markets surge on Venezuela news. This reveals sophisticated understanding that controlled interventions creating economic opportunity differ from open ended conflicts. Gold's 2.4% surge and defense stocks gaining provide hedges while energy leads.
The week ahead brings crucial data but Venezuela overshadows everything. If Trump can actually stabilize and monetize those oil reserves, it transforms Western Hemisphere energy security while crushing oil prices long term. Chevron and Exxon's existing Venezuelan expertise positions them perfectly for this opportunity.
As always, feel free to reach out with questions about navigating this week's opportunities.
Best regards,
Dan Sheehan
This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.