PickAlpha Evening Insights | 2026-01-26 - Market Wrap and Trades For Tomorrow
• Stocks mixed as durable-goods surprise lifted cyclicals and nudged rates higher. • After hours: regional banks reported quarterly results, including Capital Bancorp, Chemung and First Merchants.
Market Wrap
Market Recap — Durable-goods orders jumped sharply in November, driving a reflation tilt into cyclicals and pressuring rates expectations ($SPY, $IEF). The surprise read boosted growth and CapEx narratives and supported dollar sensitivity ($DXY). Late-day activity gave way to an earnings cluster from small/regional banks that set the tone for post-session flow ($CBNK, $CHMG).
Intraday — At 08:30 ET Census data showed durable-goods orders surged 5.3% m/m in November, with ex-transportation +0.4%, surprising expectations and bolstering cyclical positioning into the session ($SPY, $DXY). Markets parsed the hit to rate trajectories and duration instruments, with implications for short-duration proxies ($IEF, $SHY) as traders rebalanced between growth and yield exposures.
After Hours — From 16:05 ET several regional banks released results: Capital Bancorp reported 4Q EPS $0.91 with 4Q ROA 1.71% and ROE 15.23% ($CBNK), Chemung Financial posted 4Q net income $7.7M and EPS $1.61 and FY2025 net income $15.1M with a $17.5M securities-sale loss ($CHMG), and First Merchants reported 4Q EPS $0.99 and net income $70.1M ($FRME). These releases closed the day’s newsflow and feed directly into regional-bank multiple and credit discussions heading into tomorrow.
Three Trades For Tomorrow
1/3 Long $CBNK — On Jan 27, if between 9:35–10:30 ET $CBNK trades between -1% and +2% versus its Jan 26 close, go long with a stop 3% below entry and a profit target 5% above entry, exiting any remaining position by Jan 28 close.
CBNK reported 4Q EPS of $0.91 with strong profitability metrics (ROA 1.71%, ROE 15.23%) and referenced record FY2025 earnings and double-digit balance sheet growth. That combination should support a constructive ROE trajectory and regional bank multiple, so buying early post-print on a contained move aims to capture positive follow-through.
Trade credibility: actionability 7.0 | timeliness 8.0 | clarity 8.0
2/3 Short $FRME — On Jan 27, if by 10:30 ET $FRME is up ≥5% versus its Jan 26 close, initiate a short with a 3% stop above entry and a 3% profit target (covering on a 3% pullback from entry), exiting any remaining position by Jan 28 close.
FRME reported 4Q EPS of $0.99 and net income of $70.1M, but the excerpt lacks consensus or prior-year context, increasing uncertainty about whether the result is truly a beat. If the stock spikes sharply on thin information, a controlled short targets intraday overreaction in a relatively illiquid regional bank name.
Trade credibility: actionability 7.0 | timeliness 8.0 | clarity 7.0
3/3 Short $IEF — On Jan 27, after the 10:00 ET Consumer Confidence release, if by 10:15 ET $IEF is down ≥0.3% versus its 9:55 ET price, short $IEF with a 0.4% stop above entry and a 0.8% profit target, closing any remaining position by Jan 28 close.
The Conference Board Consumer Confidence report directly informs consumption expectations and rate pricing. A post-release selloff in $IEF indicates the market reading the data as growth-positive, pushing yields higher. Leaning into that move via a short in intermediate Treasuries aims to capture momentum in repricing Fed expectations.
Trade credibility: actionability 7.0 | timeliness 8.0 | clarity 7.0