MARKET COMMENTARY
Tariff pressures remain a hot topic following new announcements that a 10% import tax could be placed on up to eight European countries opposing US control of Greenland. Fortunately, negotiations are still up in the air, and the chances of a trade war ensuing are less likely than they were a year ago. The World Economic Forum is taking place this week in Davos, where many world leaders, including Trump, will be gathered. As of now, Trump plans to discuss his approach towards navigating ongoing housing affordability issues in America, but we also expect to hear further insight into potential remedies regarding Greenland.
Looking at the week ahead, the Fed’s favored measure of inflation will be released on Thursday, though it remains backlogged as it reports Personal Consumption Expenditures for November. Still, it will serve as a data point for the Fed’s meeting next week, where the central bank is expected to hold interest rates steady. Analysts expect to see somewhat of a cooldown in PCE inflation, though there is still a ways to go to reach the 2% target. Major players, including Netflix, United Airlines, P&G, and more, are set to release earnings this week as well.
Markets have been on a more positive note, but are feeling volatility related to the many geopolitical events currently unfolding. That said, gold and silver continue to see upside in this climate. We’re beginning to see a rotation out of large-cap stocks, with small and mid-cap stocks showing greater participation and outperforming large-cap in both growth and value since the start of the year. Earnings growth has been a key driver of this shift, as the earnings gap between these sectors is narrowing, signaling greater breadth in the market. Additionally, lower interest rates and the big beautiful bill are further supporting positive momentum.
Economic Releases This Week
Monday: Happy MLK Day
Tuesday: None
Wednesday: None
Thursday: PCE Index, Initial Jobless Claims
Friday: Consumer Sentiment
Stories to Start the Week
Trump’s tariff threats to takeover Greenland may cause the EU to deploy a tool known as the “big bazooka”
They quit their day jobs to bet on current events. A look inside the prediction market mania
Lisa Cook case before Supreme Court to be crucial test for Fed’s independence
Spending on data-center construction is expected to rise by 23% in 2026
To make homes affordable again, someone has to lose out
