1. BACKWIND AND RISKS
By 2025, almost every bet on the world markets was a winner. And the outlook for the year ahead is generally optimistic for investors about 2026, despite caveats about AI bubbles and possible new unrest with the U.S. Supreme Court poised to rule on the legality of President Donald Trump’s sweeping emergency tariffs and a new announcement from the Fed chairman expected soon. Some say money managers may have fallen into the “hot hand fallacy trap,” where winning streaks make gamblers more optimistic rather than worrying about their luck running out.
Others have decided it’s most rational to back U.S. retail investors, who have bet on Wall Street’s dips and become a more dominant force as they continue to double down. Investors’ fears of missing out could extend December’s positive trends, although sentiment-driven markets are vulnerable to small shocks. The chance of turbulence increases.
2. READING OF THE WAGE ROLLS
The new year brings the next installment of key US jobs data on January 9.
Concerns about a weakening labor market paved the way for the Fed to cut rates by a total of 175 basis points in 2024 and 2025. Investors expect more easing in 2026, although that will depend in part on the health of the labor market as inflation remains above target.
A Reuters poll shows that 55,000 jobs were created in December. That comes after 64,000 new jobs in November and the biggest drop in almost five years in October due to government-related cuts.The latest minutes showed that Fed policymakers only agreed to cut rates in December after a deeply nuanced debate over economic risks.
3. ROUGH CALL
Major oil producers grouped in the Organization of the Petroleum Exporting Countries and allies, called OPEC+, are likely to leave oil production levels unchanged for the first quarter of 2026 at a meeting on Sunday, sources said.
Such a decision would moderate the drive to regain market share amid fears of a looming supply glut and after oil prices fell more than 15% over the course of 2025.
But the meeting also takes place amid rising tensions between Saudi Arabia and the United Arab Emirates over Yemen. Any disagreement between the two OPEC+ powers could hamper consensus on oil production.
The eight countries – Saudi Arabia, Russia, the United Arab Emirates, Kazakhstan, Kuwait, Iraq, Algeria and Oman – have increased oil production targets by about 2.9 million barrels per day from April to December, equivalent to almost 3% of global oil demand.
4. MORE TIME TO SHINE
Precious metals are basking in the glow of back-to-back record highs for gold and silver, given ongoing geopolitical and economic headwinds. While the size and scale of purchases may be showing signs of a correction, the story is not over yet.
Despite its biggest jump in 46 years, gold retains its safe-haven cachet as central banks continue to buy and investors hedge against lingering worries from the war in Ukraine to a stock market bubble.
Silver and platinum just had their best years ever; palladium had its strongest run in fifteen years.
The year will start with a US investigation into tariffs on crucial minerals, with a decision due in January, market players say. Expect more volatility as commodity indices rebalance from January 8.
5. IPO TENTACLES
Dealmakers are positioning themselves for a stronger year of IPOs after signs of recovery in late 2025.
Total deal value in Europe, the Middle East and Africa fell to $27 billion last year from $32.6 billion in 2024, but a number of larger deals and the prospect of more to come have fueled hopes of a revival in European IPOs.
A new beast is emerging: Octopus Energy’s technology arm Kraken has taken a step towards a listing in recent days. The parent company announced that it had reached an agreement to sell a stake in the division to a group of investors led by US firm D1 Capital Partners, as part of a demerger plan.
The deal valued Kraken at $8.65 billion, and an initial public offering could be considered in the medium term, with London and New York considered as locations.
Meanwhile, China has already started off with a bang, with AI chipmaker Biren surging more than 100% in its Hong Kong debut as the IPO wave built.
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