The first full week of trading is in the books and markets are off to a positive start. Similar to the last couple of years two of the big questions coming into 2026 were whether markets could continue to move higher after the strong performance of the last couple of years and whether the broadening of the rally which began in Q4 would have staying power. It’s still early days but thus far the answer is a resounding yes.

The known catalysts for this week were the labor market and the CES Conference, but the administration wasted no time dropping this year in another re-ordering of the geopolitical table with the events in Venezuela. In general, markets have largely taken the news in stride. Materials was a standout sector up >5% with broad based strength in miners, chemicals and packaging though steel stocks moved lower. Consumer discretionary was the best performing sector, helped by the housing related stocks and Amazon. Travel related stocks were generally positive though casinos were under pressure. The sector is being helped by the expectations for large tax returns which could help consumer spending. There was some hope that the Supreme Court would rule on tariffs today but that did not come to fruition. Financials and healthcare were both up ~1.5%. Oil's reaction to the Venezuelan news seemed modest overall, ending up mid-single digits. Precious metals saw sharp gains.

Next week will be busy with the start of earnings season, a couple of high profile conferences (including JP Morgan Healthcare) and some impactful economic data (CPI). Geopolitics will remain a focal point. The decision on tariffs and the next Fed Chair could happen imminently. Next week is also options expiration. Enjoy the football Have a great weekend!