Next Day Prep: Defense Sector Shaken, Oil Plunge Ignites Energy Shift
A quick analysis of today’s market outlook and key trading opportunities to start your day.
Intro & Market Mood:
Welcome to Next Day Prep – What We Are Watching Tomorrow. Today’s market session was choppy on January 7th, 2026, with mixed signals indicating a split between cyclical sectors and mega-cap stocks.
Overnight Headlines:
- Defense Sector: President’s announcement on Truth Social impacts defense stocks, leading to significant declines in the industrial sector.
- Energy Sector: Crude oil prices drop due to potential supply increase from Venezuela, affecting the energy sector negatively while benefiting refiners like Valero.
- Nasdaq: Mega-caps such as Google, Microsoft, and NVIDIA provide support, resulting in the Nasdaq staying green amidst sectoral weaknesses.
- Healthcare Sector: M&A news boosts healthcare with reports of potential acquisitions driving stocks like Ventyx Biosciences and Revolution Medicines.
- Earnings: Penguin Solutions (P-E-N-G) faces a stock decline despite beating earnings and revenue expectations due to market preferences for revenue composition.
Economic Announcements:
Services activity accelerated to its best level in 2025. ADP employment numbers were slightly below expectations, with the bond market showing calmness as the 10-year yield drops to 4.14 percent.
Earnings Highlights:
- Eli Lilly: In talks to acquire Ventyx Biosciences, leading to a surge in the target’s stock price.
- Penguin Solutions (P-E-N-G): Beat earnings and revenue but faced a stock decline due to revenue composition concerns.
Top Movers:
- Valero: Up over 3% due to cheaper crude benefiting refiners.
- Google: Strong performance, up over 2.5% amidst market uncertainties.
- Ventyx Biosciences: Surged over 36% on M&A talks with Eli Lilly.
Quick Trade Ideas:
For active traders:
- Amkor Technology (A-M-K-R): Showing strength and potential for a push above $53. Keep an eye if it holds above $52.40.
- LightPath Technologies (L-P-T-H): Reclaimed its average price, signaling strength with potential continuation.
- Agnico Eagle Mines (A-E-M): Acting defensively, a potential hedge in choppy markets.
Key Takeaway:
Watch for follow-through selling in the defense sector, monitor key support levels for the SPY at 687, and look for strength in specific names like Amkor and Regeneron. Avoid forced trades during choppy market conditions.