All eyes on US earnings season

Japan led developed markets, boosted by Prime Minister Sanae Takaichi’s plans to unleash further fiscal stimulus, which is expected to benefit equities in the region.

On home soil, the UK market delivered an exceptional performance, driven by strong corporate earnings and improving sentiment in energy and commodities.

On a sector basis, technology stocks continued to thrive and the likes of Alphabet and META were among the AI-infrastructure winners in the month. But the upward trend is not being enjoyed across the entire sector, and areas such as IT software where AI is being seen as a threat to business models lagged behind.

The geopolitical noise has not changed our outlook for equities in 2026. With supportive fiscal and monetary policy and strong structural drivers, such as accelerating AI investment, we remain constructive.


All that glitters?

Gold continued its upward march as the year began. Shifts in US government policy have prompted investors and central banks to look away from the dollar, which has historically been considered the ultimate safe haven, and it fell almost 1.5% in January against a basket of other currencies.

While some have looked to alternative currencies as “safe havens”, such as the Swiss franc, precious metals have gained much of the attention. Gold reached a record $5,608 per ounce during the month of January, while silver also found a new high of $121, before falling precipitously on the last day in January, with Gold ending the month around $4,900 and Silver around $85 – an unprecedented amount of volatility, after an equally unprecedented rise over the course of the month.

Gold can be a valuable tool in a portfolio, adding diversification as well as protection against inflation and geopolitical stress. Its value tends to hold up during periods of uncertainty and currency concerns. Silver does this to a lesser extent, and can also be considerably more volatile. 

After such a strong rally, however, we believe there may be a limit to the upside from here in the near term, as well as the protection benefit that it normally serves in our portfolios. We are mindful that the strong flows into gold exchange-traded funds (ETFs) could quickly turn to outflows.

We are watching closely and continue to assess when it may be appropriate to add gold to our multi-asset portfolios. We feel it is important to ignore the FOMO (fear of missing out) and maintain our long-term investment discipline.


Why we are positive on the US, Japan and Europe for 2026

We continue to believe there are tailwinds that should drive equities in 2026.

In the US, the effects of Trump’s budget reconciliation bill will start being felt and there is the chance of further stimulus ahead of the mid-term elections in November. Trade policy, which was previously a headwind, will become less of a drag.

Elsewhere, we have seen a shift in policy in Japan and Germany, with governments taking measures to boost their economy. Ongoing corporate reforms in Japan and increasing government investment on defence and manufacturing in Germany add to a positive outlook.

In the UK, the chancellor Rachel Reeves has taken the opposite approach, focusing on building fiscal headroom. However, we believe most of the drag from this will not be felt until much later in the term.

Key structural drivers are also creating opportunities. The growth of AI and the investment into the sector is colossal - the so-called hyperscalers recently raised their spending forecasts for the coming year from $540 billion to $561 million, an incredible 38% higher than 2025.


All eyes on US earnings season

Big US companies have started reporting their results for the final quarter of 2025 and the early numbers show earnings growth across the board - albeit with the tech giants leading the way.

All of the major US banks have already reported. These businesses sit at the centre of the real economy - seeing shifts in spending, borrowing and creditworthiness from both consumers and businesses - which means they offer a useful health check of the economy.

Their results are pointing to a resilient backdrop, with steady consumer spending and an economy that continues to borrow, invest and expand.

Despite that, bank stocks saw some volatility due to concerns around proposed regulations that could cap credit card interest rates and reduce merchant fees in the US. These proposals could hurt profitability for some firms if implemented, but look unlikely to take effect.

As we continue through the season, we look forward to getting more insights from tech and AI companies on their earnings and spending, as well as from consumer discretionary companies, which provide information on the strength of household spending, and industrials and other capex-driven businesses, which can offer insights into corporate investment trends.

Volatility and swings in market sentiment across regions, sectors or themes is an expected part of investment. AI developments are creating both benefits for certain sectors and potential for improvements in economic productivity, but also producing risks to business models and creating uncertainty for investors. January’s cascade of news and events offered another demonstration that looking through some of the short-term headlines while maintaining a diversified approach continues to be a prudent way to build wealth for the long term.

Information correct as of 5th February 2026.