Market Musings 170126: Remaining a nervous bull
Market Musings 170126: Remaining a nervous bull
Monthly report and video: Investment Strategy Focus January 2026 (click on link to read/watch)
Can stocks maintain their run streak in 2026?
1. US Q1 positive growth surprise? The One Big Beautiful Bill Act passed last year put in place several lower tax rates, resulting in lower 2025 tax bills for many US households and larger Q1 2026 tax refunds (USD 1000+ average per household). This should boost US domestic consumption and GDP growth over Q1 2026
2. Long-term bond yields to rise further? Over 2025, the Japanese 10-year JGB bond yield almost doubled from 1.1% to 2%, while German 10-year bund yields rose from 2.4% to 2.9%. Lower inflation but high debt refinancing requirements pull yields in different directions. Expect little movement in 10-year bond yields.
3. Stock leadership rotates to Value from Tech: in 2025, global value outperformed growth by a record 18% in USD after 8 consecutive years of growth dominating. Favour value-oriented sectors such as Financials, Industrials and Building amp; Construction. Strong momentum in UK, Spanish, Swiss and Swedish stocks.
4. Strategic industrial metals in a bull market phase: copper, tin and aluminium continue to gain...