What Happened Last Week
- Equity Broadening: Equities outside of the Mag-7 continue to lead their mega-cap counterparts.
- Venezuela Operation: U.S. Special Forces captured Venezuelan President Nicolas Maduro in an overnight raid on Saturday.
- Precious Metals: Gold and silver continued to rally, getting fresh support from a new bout of geopolitical uncertainty.
What We’re Watching This Week
- Economic Data: This week will bring December non-farm payrolls and some forward-looking business surveys.
- Venezuela Fallout: Investors will continue to assess the fallout from the weekend’s raid, with a focus on oil prices.
- Tech Conference: Updates from Nvidia’s Jensen Huang and others will help establish the 2026 outlook for tech and AI.
Investment Management Team’s Views
Global equities closed out 2025 with weaker price action amid low-volume holiday trading. While the move lower in stocks after Christmas was symptomatic of a whippy year in markets, it told only part of the story. The outperformance of the average U.S. stock and broad international stocks over the Mag-7 and AI themes indicates that the emerging broadening theme has some staying power. International stocks closed last Friday at all-time highs, and the upcoming earnings season will be an important barometer of whether broader market participation continues. Additionally, investors continue to watch for new developments in the AI theme, which is likely to remain a major driver of broad market performance in 2026.
The weekend’s news of the capture of Venezuelan socialist leader, Nicolas Maduro, serves as a reminder that geopolitical risk and policy uncertainty were not unique to 2025, but a new reality in markets. The situation remains incredibly fluid, but the early market reaction has been muted. Venezuela produces less than 1 million barrels per day, down from over 3 million per day before Maduro took power in 2013. Any benefit from increased Venezuelan oil production will take considerable time and investment to materialize. Still, the prospect of a greater oil supply is positive for economic and investor sentiment, particularly as affordability concerns dominate U.S. politics.
On the data front, investors will have to digest December non-farm payrolls as we continue to wade through the effects of last year’s prolonged government shutdown. In addition, markets will have some forward-looking business surveys to add to the economic mosaic. Beyond the data, a major tech conference in Las Vegas will provide an opportunity for CEOs to update investors on their 2026 plans. The CEOs of Advanced Micro Devices (AMD) and Nvidia will kick the event off after Monday’s market close. Beyond this week’s data, earnings reports for the final months of 2025 will begin to hit the wire next week.