Fresh perspectives on economic trends and events impacting the global markets.
Markets largely expected last week’s tariff decision and the flare-up in US-Iran tensions, while new US economic data was weaker than anticipated.
On one side, weaker growth makes Fed easing more likely. On the other side, stronger growth supports an intact business cycle. Either can be supportive of markets if inflation stays contained.
Despite last week’s selloff in software stocks and other momentum-driven areas, we believe the fundamental backdrop remains supportive.
We got some clarity on the two big risks we outlined in our 2026 investment outlook: Federal Reserve independence and an AI bubble.
Geopolitical risks have risen, but bond spreads, economic and inflation data, and the US dollar haven’t signaled any major stock market issues.
The calendar flipped to a new year, but macro and market trends look largely the same: Resilience in the US economy, geopolitical shifts, and tariff talk.
The potential use of the justice system against a sitting Federal Reserve Chair represents a line that markets have not previously had to price.
A rise in Venezuelan oil production could pressure oil prices in a few years. In the meantime, we expect an accelerating global economy to boost demand for oil and support prices.
For investors looking to diversify their mega-cap technology exposure, improving growth and falling interest rates may be good reasons.
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