Starting the year fast
When things get chaotic...keep your head
Where to start with 2026 so far?
There’s been a lot going on. Iran, Venezuela, a short squeeze in Silver, Davos, New Fed Chair announced….and the rest.
At the same time, it’s important to remind ourselves that what really moves markets is not what dominates the headlines in the newspapers (which are usually all negative) but rather factors such as the outlook for corporate earnings, and inflation expectations.
Currently we are in an environment where people got too negative on the outlook for economic growth, and by extension corporate earnings, while expecting inflation to be higher for longer.
What is currently transpiring is economic growth staying stable (and positive), while we have disinflation coming through. This is the most bullish scenario for equities as both economic growth and inflation is better than expected.
In this scenario you would expect small caps to outperform large caps, high beta stocks to outperform low beta and cyclical stocks to beat defensives.
All this is happening. The only surprise is that crypto is not performing well - although this could be the 4 year cycle in Bitcoin holding true.
So, consider this a useful reminder to not get too distracted by the headlines and geopolitical news.
Focus on what really moves the market.
Stock Updates
Purecycle Technologies ($PCT)
This stock had a disappointing end to the year, falling throughout November and into December. Here’s why.
