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Smart insight and clear visuals that matter – what we’re watching now and how intention and conviction shape our portfolios.

Markets

US tech stocks fell sharply yesterday as weak jobs data piled further pressure on a market reeling from a big sell-off in the software sector.

Fed Chair

The announcement of the next US Fed Chairman last Friday seemed to trigger a rally in the USD and a major fall in silver (SLV -28.5% on 1/30/26) and gold (GLD -10.3% on 01/30/26) on reduced ‘safe haven’ demand - The Friday Massacre. Yes, those are single/one day price moves. President Trump’s nomination of Kevin Warsh to lead the Federal Reserve caught the market off guard. Investors perceived Warsh as a hawk who would be less supportive of aggressive interest rate cuts. The double whammy emerged as the CME Group reportedly increased margin requirements for gold and silver contracts mid-session, forcing a wave of forced liquidations.

Earnings

Earnings season coming in relatively strong again. S&P 500 Q4 earnings growth was marked up meaningfully over the week to 11.67% with a 78% beat rate. The next twelve-month (NTM) earnings per share estimates did move higher in January now at 14.10% growth for 2026. In the MSCI emerging markets and EAFE, we saw a massive boost to earnings growth penciled in a year from now.

• The MSCI EAFE earnings growth in 2025 is shaping up to be 4.51%, but the estimate a year from now in Q4 is 18.42%.
• In emerging markets, the earnings growth in 2025 is 10.85%, but the Q4 of 2026 estimate is 32.24%.

Banking

The past decade of restructuring has created a structurally resilient and more profitable banking sector in Europe. European banks have significantly fortified their reserves, with capital ratios dramatically increasing since the GFC. Today, tangible common equity ratios have nearly doubled since 2007 with major European banks maintaining CET1 ratios above 13%. Once central banks, including the ECB, began rate hikes in 2022, European banks experienced a large improvement in Net Interest Income (NII). Expense growth has remained contained due to digitalization and cost discipline, leading to strong operating leverage. Despite comparable capital generation and profitability, European banks continue to trade at a discount to US peers.

Tech

Higher bar for AI/tech

META encouraged investors with the degree to which AI investments are fueling upside to estimates, but cracks in the MSFT story hit the stock despite solid results vs expectations. MSFT generated concerns around meeting cloud demand (in part from a large OpenAI backlog accounting for 45%).

The overall AI narrative continues to become less consistent with doubts around the OpenAI/ NVDA financing deal. GOOGL results add to overall positive outlook. It’s been 25 years since the peak of the dot-com bubble (03/10/2000), and yet despite the 15-year recovery, Tech stocks have become the most consequential wealth creation mechanism in financial history.

Software Stocks Under Pressure

Software stocks continue to face pressure as investors home in on Anthropic’s announcement that it was adding new legal tools to its Cowork assistant meant to help automate a number of legal drafting and research tasks. Shares of Thomson Reuters, Legalzoom.com, and London Stock Exchange, which all provide some form of legal tools or research databases, all fell more than 12%.

Emerging Markets & AI Supply Chains

While much of the enthusiasm around AI has been concentrated in the US, the long-term success of AI depends heavily on the supply-chain strength and manufacturing capabilities of EM economies. EMs are deeply embedded in the global AI ecosystem. For example, roughly 70% of global semiconductor and AI hardware exports in 2025 came from EMs. This manufacturing depth, combined with their strategic role in AI supply chains position EMs as a long-term beneficiary of the global AI transformation, which help make the case for EM combined with relatively attractive valuations.

High Yield Credit

High‑Yield Credit & Market Conditions

High‑yield spreads are plumbing the absolute lows DESPITE the rise in market volatility. The spread between high‑yield debt and the 10‑year Treasury is 273 bps, this is down from a tight 290 bps to start the year and close to the low of 262 bps set back in June '07. The YTM of High Yield is down under 7% vs. 8.1% back in '07 and its long-term average of 8.6%. Corporate balance sheets are strong as the sum of the cash inside Russel small, excluding Financials, stands at $354.4B, close to an all-time high. Debt levels are slightly higher than average and above the '07 levels, but again cash levels are higher, however this doesn’t leave much room for error.

Real Estate

Senior Housing

Senior housing emerged as one of CRE’s strongest performers in 2025, driven by powerful demographic tailwinds and tightening supply. Occupancy reached a 10-year high of 90.4% in Q3 2025. Deal volume rose to 110% of 2019 levels. New senior housing supply slowed 60% YoY.

REITs

We continue to see small/mid cap REITs taken out buy private equity confirming the valuation gap between publics and privates. Not included in the chart is Ares Management acquisition of Plymouth Industrial REIT, the largest take private since Prologis bought Duke Realty for $26 BN in 2022. Ares paid a 50% premium to pre-deal stock price.

Global Real Estate

Global luxury real estate has decoupled from mainstream housing markets. While interest rates have slowed average home prices, prime and super‑prime homes continue to rise rapidly, especially in cities favored by global high‑net‑worth buyers. Many luxury markets have posted double‑digit or even triple‑digit increases over five years, far exceeding local income growth or inflation.

Economic Calendar: Week Ahead (Eastern Time)

Tues, 2/10 @ 830 am: Import Price Index (delayed report)
@ 830 am: U.S. retail sales (delayed report)

Wed, 2/11 @ 830 am: U.S. Employment Report
@ 830 am: U.S. Unemployment Rate
@ 830 am: U.S. Hourly Wages
@ 200 pm: Monthly U.S. Federal Budget

Thu, 2/12 @ 830 am: Initial Jobless Claims
@ 10 am: Existing Home Sales

Fri, 2/13 @ 830 am: Consumer Price Index/ CPI YoY
@ 830 am: Core CPI/ Core CPI YoY