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Please see below, an article from Tatton Investment Management, analysing the key factors currently affecting global investment markets. Received this morning – 02/02/2026

End of euphoria, back to normal? 

Equities hit all time highs early last week, but US stocks sold off after Microsoft’s earnings. A ‘normal’ sell-off based on earnings would be mildly comforting, after recent political risk sell-offs. However, there are liquidity risk signals over weekend trading. Gold, silver and Bitcoin have hit large profit-taking, which appears to be bleeding into emerging market equities; for example, the main South African index has fallen over 6% in today’s first hours of trading.

Gold prices have skyrocketed over the past two years, and the total stock of gold is probably now worth over $35tn – twice the size of the US treasury market and nearly a quarter the equity market capitalisation. Investors have raised their gold allocations, but we don’t think this reallocation is sustainable. Highly leveraged positions in gold suggest there has been a lot of short-term speculation recently. Gold’s actual free-float and daily trading liquidity is much smaller than bonds or equities, meaning it doesn’t take much to move gold prices. Long-term investors should be wary: it’s a valuable insurance in uncertain times, but the insurance premium is now very high.

The dollar slid to its lowest level in four years after Trump called dollar weakness “great”, but Scott Bessent’s reassurance stabilised the currency. The TACO factor is helping to calm things, from (temporarily) avoiding a government shutdown to Trump appointing the experienced Kevin Warsh as next Fed chair. Markets didn’t even mind the president calling current chair Powell a “moron” for the Fed not cutting rates. The Fed referenced a rebounding labour market, but high profile layoffs still have bond markets betting on a summer rate cut. In any case, Trump’s usual disruption isn’t putting any extra pressure on the dollar.

US threats against Iran pushed up oil prices, but stock markets were focussed on Microsoft’s earnings. The tech giant’s cloud growth disappointed and its intertwining with OpenAI revived the talk of ‘circular financing’. In contrast, Meta’s better-than-expected results boosted its shares, even though Meta is spending big on AI too. This shows investors will still reward big investments, as long as they’re the right ones.

The fundamental growth and earnings outlook is strong, so it would be nice if politics continued to take a backseat.

Starmer in China – a pragmatic friendship

Kier Starmer’s trip to China has yielded incremental but meaningful results: visa-free travel for UK citizens, a “feasibility study” on a future services trade deal, and lines of communication on trade. Britain has a large trade deficit with China (it’s more than doubled since the last time a Prime Minister visited China in 2018), so the biggest prize for UK businesses would be gaining market access. There were encouraging signs on this, but the underlying problem is a chronic lack of Chinese consumer demand. Despite Beijing’s continued fiscal stimulus, Chinese consumers save too much and don’t spend enough. Measures to address the problem have mostly just added to overproduction issues (e.g. by increasing employment).

But trade deals are about the long-term – and China will have to resolve its oversaving problem one way or another. Beijing’s next five-year economic plan will reportedly emphasise private business, so this could be the ideal time to get access to Chinese markets. In theory, Britain’s supply-side problems and investment services expertise complements China’s overproduction and huge stock of savings. But in practice, restricted information on Chinese companies hinders investment, while Chinese imports to the UK often incur accusations of ‘dumping’.

Trump called the UK’s talks with China “very dangerous”, and last week threatened a 100% tariff on Canada if it makes a trade deal with China. But these are increasingly seen as empty threats, given the US Supreme Court’s pending ruling on tariffs, and Trump’s own record of backing down. China itself can be a dangerous trading partner, though: Beijing restricted Nexperia chips last year over a feud with the Netherlands, nearly halting global car manufacturing.

China is currently trying to play nice, though, and its long-term goals (creating an alternative to US-led order, internationalising the renminbi) suggest that will continue. Pursuing closer ties with China is a gamble, but probably a worthwhile one.

Will European growth stay peripheral?

Absolute Strategy Research (ASR) point out that Europe’s so-called periphery nations are doing much better than the core. Since the start of 2025, stock returns in Greece (+55%), Spain (+46%) and Italy (+37%) have been better than France (+8%) and Germany (+18%). Peripheral corporate profits are being revised up, and core profits down. It’s a role reversal for the previously high debt, low growth countries derogatorily referred to as the ‘PIIGS’ (Portugal, Italy, Ireland, Greece and Spain).

ECB interest rates used to be low for the German growth machine and punishingly high for the periphery – but that trend has now reversed. Peripheral stocks still have lower valuations than in France and Germany, too.

The NextGenerationEU fiscal package has boosted periphery growth more than in the core, but the NextGen boost won’t be as strong in 2026 as it has been since the pandemic. In contrast, Germany’s defence spending spree will come this year, benefitting manufacturers with spare capacity. We therefore expect core profit growth to catch up – with the possible exception of France, with its idiosyncratic political paralysis.

A strong periphery is good news for Europe, as the concentration of European growth on Germany has been a structural problem for decades. Peripheral profit growth is a strong counterpoint to those who are sceptical of the US-to-EU capital rotation. While aggregate European profits still lag US large cap, there are decent earnings dynamics to be found in Europe and, thanks to lower European equity valuations, profits don’t need to be world bearing to be attractive.

Peripheral growth is helping to overcome Europe’s structural inequalities and fiscal stimulus should help its oversaving problem. There’s talk of a “two speed” union, to get around the paralysis issue too. This is helping the mood for European equities.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Marcus Blenkinsop

2^nd February 2026

Please see below, an article from EPIC Investment Partners which discusses the fall in the value of the US Dollar over the past year. Received today – 30/01/2026

Eight billion dollars a day is the cost of US borrowing. That was the pace at which federal debt was rising when it passed the $38.5tn milestone earlier this month. Interest payments have already overtaken defence spending and are on track to exceed $1tn this year, absorbing an ever-larger share of fiscal capacity. At this rate, the durability of the dollar depends less on the size of the American economy than on the credibility of the institutions that manage its liabilities.

When governments borrow at this scale, reserve-currency status becomes a matter of trust rather than output. Investors must believe that monetary policy remains insulated from political pressure and that central banks act independently when fiscal strains intensify. Once that assumption weakens, risk premia rise incrementally rather than dramatically, through quiet reallocations rather than sudden flight.

History offers clear precedents. Spain’s silver-backed real faltered not because silver disappeared, but because repeated defaults revealed a state willing to treat money as an extension of war finance. The Dutch guilder followed a subtler path. In the late eighteenth century, the Bank of Amsterdam relaxed its rigid metallic discipline to support favoured borrowers, including the Dutch East India Company and struggling municipalities. When that became apparent, confidence in bank money evaporated and did not recover.

The United States now faces a comparable test on a far larger scale. The pressure is not inflation in the narrow sense, but institutional. The issuing of grand jury subpoenas to Federal Reserve chair Jerome Powell, after months of political attacks linked to the cost of servicing federal debt, marked a break with conventions markets had long treated as settled. The legal merits matter less than the precedent. If the independence of the central bank can be challenged in this way, monetary policy no longer appears neutral. It begins to look constrained by the state’s borrowing requirements.

That backdrop lends financial relevance to a dispute far from Washington. Greenland’s strategic value has long been managed through alliance structures that separated military access from political ownership. By reframing the issue as one of control, and by briefly threatening tariffs against European partners, Washington turned a peripheral security question into a broader test of restraint. Investors were less concerned with the Arctic itself than with the willingness to deploy economic pressure in ways that cut across long-standing norms.

Markets responded predictably. The dollar has fallen roughly 10 per cent over the past year and slid to a four-year low this week. More telling has been the behaviour of long-term institutions. Denmark’s AkademikerPension has reduced its holdings of US Treasuries, citing concerns over public finances and the independence of the Federal Reserve.

In numerical terms, the move is modest. As a signal, it is not. When investors that have long treated US government debt as the world’s risk-free benchmark begin to price in political risk, the foundations of reserve status begin to shift. The dollar continues to function, but it loses something more subtle: its presumption of neutrality.

None of this points to an imminent end to dollar dominance. Liquidity, scale and legal infrastructure still matter, and no alternative offers a comparable combination of depth and reach. But reserve currencies rarely fail abruptly. They erode through higher term premia, gradual diversification and declining assumptions of institutional restraint.

The Arctic dispute, then, is not about ice or islands. It is a stress test of credibility at a moment when the fiscal arithmetic has become unforgiving. History suggests that once trust is traded for convenience, even briefly, it is difficult to reclaim. Confidence rarely collapses in public. It erodes quietly, over time.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Alex Kitteringham

30^th January 2026

Please see the below article from EPIC Investment Partners detailing their discussions on Trump’s latest activities. Received yesterday afternoon 28/01/2026.

Should investors worry?

President Trump’s much anticipated speech at Davos confirmed what many of us have assumed, that the US will not use force against Greenland, a NATO ally. It also laid into many globalist beliefs, branding net zero policies as a “green scam”, attacking Europe’s continued shortfall on defending itself and saying that countries that want to shift to renewables and decarbonised industry are stupid, playing into the hands of a strong and cynical China. President Trump is still determined to get a better deal over Greenland, frustrated over the absence of agreement to end the war in Ukraine and dismissive of European dear energy and high migration policies which he thinks undermine their economies and societies. President Trump continues with tariffs as his main weapon and refuses to worry about the damage to trade and relations these cause.

By way of balance to these views, Prime Minister Carney of Canada has also told some home truths to his fellow globalists. He recognises the break down in the international rules-based system of NATO, WTO, UN and urges other middle powers to take action to protect themselves. “A country that cannot feed itself, fuel itself or defend itself has few options”. He is seeking closer contacts with China, the EU and other players for Canada as he worries about how much continued trade and support he can count on from his neighbour, the USA. Mrs Von Der Leyen on behalf of the EU also thinks the “shift in the international order is not only seismic – but it is permanent” “We now live in a world of raw power”. This is a strange time to announce this, as surely Putin expressed that view with force from 2014 onwards in Ukraine and China has always taken an asymmetric approach to international law. The USA has never accepted the right of international courts to dictate to it and has always had a veto on UN action. The EU proposes closer and faster European integration and wants a stronger EU military with capability in the Arctic circle to help Denmark/Greenland.

The US sphere of influence

President Trump has been clear in his foreign policy aims. He thinks Europeans should take more responsibility for their own defence. He has pushed them to increase their spending on military force and sees Ukraine as an EU problem as Ukraine is seeking to be a member and has close relations with the EU. Whilst he has not pulled the US out of NATO, he uses the full bargaining power US dominance gives to make it clear Europeans have to do much more. The US has no wish to fund or fight the war in Ukraine for them.

He has modernised the Monroe doctrine which stated that Europeans should keep out of the Americas and the US would keep out of Europe. His Monroe doctrine sees the lands from Greenland and Canada in the North to Chile in the south as an area of great strategic importance to the US where the US will intervene and influence developments.

Some think this means the US becomes a dominant regional power, but the President has been keen to set out he sees the US in a competition with China for world sway. He has not ruled out defending or intervening in Asia should China overreach. He is keen to keep Diego Garcia and other big Asian bases and to reinforce the freedom to navigate the China Sea and the Taiwan Straits. He looks to Japan to provide more support.

He now intends to heavily influence Venezuela by channelling investment and organising the oil trade and oil revenues, sharing them with Venezuela itself. He wants a new relationship with Greenland as he wishes to strengthen US/Greenland defences into the Arctic circle and to exploit the minerals there.

The Greenland problem

Greenland is a self-governing territory but also a colony of Denmark; with Denmark having powers over foreign policy, defence and providing some money. It has a population of just 56,000 people in a few small towns on the relatively ice free southwestern coastal strip. It is a huge area of land and ice sheet covering several islands in the Greenland group. The Danish King is the Head of State for ceremonial purposes. Denmark sends an annual grant to assist the Greenland economy. Greenland has two representatives elected to the Danish Parliament. Most Greenlanders want to be independent of Denmark, but do not want to become a state of the USA.

During the Second World War the US sent a military force to Greenland to prevent German occupation at a time when Denmark had been incorporated into the Third Reich by force.

Greenland has a defence agreement with the USA. There is an important US military base on the islands. The US would like to strengthen its defences in the area given Russian and Chinese interest in the Arctic Circle. The US sees the oil, gas and minerals potential as a way to pay for the defence and to improve the incomes of local people. Greenlanders are in the main opposed to a big increase in commercial exploitation of natural resources. Most of the deposits are well away from the small populated coastal strip in the southwest corner.

The main European allies of the US have said the US should rule out any idea of sending in forces to take charge of a democratic member of NATO. There are diplomatic possibilities to improve the US offer of defence support and to find some agreement on joint economic development. Given the wish of many Greenlanders to be free of Denmark they would need more revenue to replace the Danish grant. With agreement it would be possible to settle many new people in Greenland well in excess of current population numbers to boost investment and output. President Trump was accompanied in Davos by Trade Secretary Lutnick and Treasury Secretary Bessent. The Secretaries were measured and keen to engage in negotiations to seek to find a way round a tariff war over Greenland’s future.

The Chinese sphere of influence

China joined the World Trade Organisation in 2001 on favourable terms. It gave China easy access to lucrative Western markets whilst allowing a variety of restrictions and obstacles to trade to still be imposed on Western exporters to China and investors in China. China has used the last quarter of a century well, to accelerate growth and to build its Belt and Road initiative. This has meant investing in crucial infrastructure in a wide range of countries between China and the West, gaining profitable contracts, creating plenty of Chinese jobs and securing influence over those countries.

China has tightened its control and restricted democracy in Hong Kong after negotiating a transfer based on promises to keep the freedoms of the previous system going. China has built settlements and facilities on small islands and atolls in the China Sea to claim much greater sway over the whole area. China is building a huge military including amphibious capability of the kind needed to invade Taiwan.

China has seen Russia’s difficulties in trying to secure Ukraine and has used these to strengthen its dominant position in the Sino-Russian alliance. It has helped it secure more cheap energy and more markets for its military and manufactured products. China has increased its influence in the Middle East with strong links to Iran and its proxies. China’s reach also stretches into Latin America via Cuba, and it was close to the Venezuela dictator. China wishes to be the world’s dominant power and has almost four times as many people than the US as a help. However, China remains respectful of US technology and military reach.

Likely developments

Geopolitics remains an important backdrop to investing. It is unlikely there will be war between the US and Russia, let alone China. It is proving difficult to resolve war with Ukraine as Russia still thinks there is gain to be had by continuing the murderous conflict, relying on the inability of the Europeans to marshal enough money and force to give Ukraine a victory. The US is unlikely to invade Greenland but will intensify diplomatic pressures to see if there is a deal to be done on defence and minerals. China will continue to menace Taiwan but will not invade given President Trump’s new belligerence. There will be further action by the US to enforce sanctions more strictly.

The Canadians and Europeans are overstating the seismic change they see. Over the last decade it has been quite clear Russia, China, Iran, North Korea and others have always reserved their claimed right to exercise raw power and have applied world rules only when it suits them. Over the next decade there could be further large changes in US policy under President Trump’s replacement. The biggest change being brought about by President Trump is to energy, where he has given a big boost to fossil fuels alongside the use of them in China, Russia, India, Brazil and other big markets. This has helped strand the EU and the UK with dear energy and with a big demand for imports of green products from China. Meanwhile the US giant companies in digital technology have extended their lead on the rest and dominate world stock markets and economies.

On these assumptions share markets can make more progress for investors this year. The announcement of a massive increase in defence spending by the US is providing a further boost to the defence sector which has been doing well on better prospects for orders for some time. Adding Venezuelan oil to western sources and building up the flows will help prevent big upward moves in energy prices to worry Central Banks about inflation. There are some signs that inward and domestic digital investment is giving the US a substantial productivity boost, with the US representatives at Davos particularly bullish about likely growth this year for their own economy.

Please continue to check our blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses.

Andrew Lloyd

29/01/2026

Please see this week’s Markets in a Minute update below from Brewin Dolphin, received yesterday afternoon – 27/01/2026.  

How are U.S. tariff threats impacting markets?

We examine the market’s reaction to President Trump’s threats to impose tariffs on Europe over Greenland.

Key highlights

• Davos and the debt markets: Equities struggled as President Trump threatened tariffs against NATO members for their stance on Greenland.
• All that glitters is gold: Gold benefitted from the news, exceeding the financial landmark of $5,000 per troy ounce.
• UK retail sales boost: Retail sales expanded on a seasonally-adjusted basis and consumer sentiment improved.

Davos and the debt markets

Equity markets struggled last week, rocked by a news flow that at times had somewhat ominous overtones – even if the fundamental and tangible drivers of equity performance still seem to be in place.

The ominous news flow predictably came from U.S. President Donald Trump. As he prepared to attend the World Economic Forum in Davos, his rhetoric over Greenland suggested little room for compromise and a determination to take sovereignty over the region from NATO ally Denmark.

In response, some NATO members planned exercises in the region. This prompted the president to declare that they would be punished by tariffs beginning in February, increasing in June and staying in place until America’s acquisition of Greenland has been completed.

With their usual dispassionate approach to foreign affairs, markets were little moved by threats to Greenland’s sovereignty, but they were concerned about the possibility of tariffs. Equities were weaker, the dollar fell, and bond yields rose. Gold remains one of the few asset classes to benefit from this news.

Source: LSEG Datastream

Following the ‘Liberation Day’ tariffs, countries have generally been reluctant to impose retaliatory tariffs on the U.S., partly because those with balance of payments surpluses with the U.S. would appear to have more to lose from a trade war. This latest tariff threat created an additional challenge – U.S. tariffs were only imposed on eight countries participating in NATO exercises, but retaliation would need to come from the European Union as a whole. Dragging a lot of countries into a trade war that has the scope to escalate further would test the unity of the Eurozone.

Could an alternative be for Europeans to sell their holdings of U.S. treasuries? Europe as a region is believed to hold around 12% of U.S. treasuries, the sale of which would put upward pressure on U.S. borrowing costs.

The complication is that many of those bonds are private sector holdings and are therefore outside the control of the state. Mobilising them to sell would be nearly impossible. Many may be beneficially owned by stakeholders outside Europe anyway. And for most, the decision to hold them reflects the liquidity that only the treasury market can offer – or a need to hold U.S. assets to avoid losing currency competitiveness against the U.S. The desire to hold less treasuries is powerful and explains part of the rise in gold as an alternative home.

Returning to the topic of Davos, this has typically been a forum in which countries and business leaders find ways to help each other. President Trump’s involvement has been to shift the narrative to one of greater self-sufficiency and self-interest. It’s a uncomfortable message for those who aren’t part of the world’s largest economy, but it’s one that was taken head on by Canadian Prime Minister Mark Carney. He talked about the need for middle countries to accept that the old global rules-based order is no more, and that middle power countries like Canada, the UK and the EU states finding flexible alliances will be the way to avoid subordination to the global superpowers.

It’s a stark but compelling reality, which RBC Chief Executive Officer Dave McKay was asked to expand upon at the Forum.

As the week progressed, a tentative de-escalation was brokered by NATO Secretary Mark Rutte. It sounded as if President Trump would be willing to drop his demand for Greenland’s sovereignty in exchange for military access. It’s understood that some access to Greenland’s mineral wealth would also be afforded. Greenland holds significant deposits of rare earth elements. However, Helima Croft, RBC’s Head of Commodity Strategy, believes they’re remote, ice-covered and expensive to access.

The debate over Greenland forms a further evolution of the ‘Worlds Apart’ theme, which RBC Wealth Management identified three years ago. What began as a rupture in trade seems to be becoming broader and more fundamental with each month that passes. It discourages investors from holding U.S. assets, even if only at the margin, and has contributed towards the weakness of the dollar and the rise in the gold price. As such, it contributes to an overlapping theme of debasement, which is more substantially represented by the U.S.’s reluctance to address its unrepentant government borrowing.

Source: LSEG Datastream

Rising government debt has been a concern for many industrialised countries, but the U.S. is certainly a stand-out because under both the Republicans and Democrats, the forecast public finances have been allowed to worsen.

UK sees retail sales boost

In the UK, by contrast, last week saw some good news on the public finances.

The fiscal position is stretched in the UK. However, governments do take tough actions based on recommendations by the independent fiscal watchdog and will take some comfort that borrowing has increased more slowly than expected.

In other UK news, retail sales expanded on a seasonally-adjusted basis and some aspects of consumer sentiment improved. It does seem as if UK consumers held back spending due to concerns over the prospect of tax hikes in the Autumn Budget, but they may now feel confident to indulge a little more. Recent interest rate cuts will also help.

Please continue to check our blog content for advice, planning issues and the latest investment market and economic updates from leading investment houses.

Charlotte Clarke

28/01/2026

Please see the below article from EPIC Investment Partners detailing their discussions on China’s Domestic Consumption. Received this morning 27/01/2026.

Picking through China’s FY2025 and 4Q2025 economic data releases does not make great reading for those of us hoping for a decent recovery in Chinese domestic demand. Household savings have gone through the roof in recent years but there are few signs that consumers will run these savings down despite the miserable interest income received.

One bright spot in recent years has been consumer spending on services. Following the 2020 COVID induced collapse in spending, services have recovered to account for some 45% of total consumption expenditure, the same percentage as 2019. The rate of growth, however, has slowed from 7.4% in 2024 to just 4.5% in 2025.

The distinctive whiff of deflation is evidenced by eleven consecutive quarters where nominal GDP growth has been lower than real GDP growth. Nominal growth was just 4.0% in 2025 while 4Q2025 growth fell to 3.8%. The has to be considered in the context of a 5.0% rise in nominal disposable income per capita in 2025. Household consumption accounted for 39.9% of nominal GDP in 2024. While higher than the lows of circa 35% witnessed during the GFC, this compares to 45% or so at the turn of the century.

The continued weakness of residential property prices (prices fell 13.0% while volumes contracted 9.2% in 2025) must be considered one of the main reasons that consumers remain nervous. Many of them (the majority?) are property owners. Spending in the construction and real estate sectors peaked at roughly 15% of GDP in 2021: it is now just 12%.

Rightly or wrongly, our Asian portfolios have significant exposure to the consumer discretionary sector – much of this in Chinese related positions. The authorities have a formally stated objective of boosting household consumption as a percentage of GDP. We just wish they would get on with it!

Please continue to check our blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses.

Alex Clare

27/01/2026

Please see below, an article from Tatton Investment Management, analysing the key factors currently affecting global investment markets. Received this morning – 26/01/2026

Weak links in the outlook

Trump threatened and retreated, but markets ended slightly down last week. On the bright side, the TACO trade is protecting against the downside.

40-year Japanese government bonds (JGBs) broke through 4% for the first time ever. The long-maturity JGB market is notoriously illiquid, dominated by large insurance companies. Japan’s recent economic and stock market strength actually lessened their need to hold JGBs, which worsened liquidity and allowed small selling pressures (after Takaichi’s tax cuts) to become a sharp sell-off. Just like UK bonds after the ‘Liz Truss moment’, there will be eager buyers for historically cheap JGBs, but they may stay cheap for some time.

US Treasury Secretary Bessent was wrong to blame Japan for the increase in US yields, however. US yields rose higher than others and the dollar weakened – a clear policy risk signal. US bond fundamentals are changing too: wage and supply chain pressures have hardened the inflation and interest rate outlook. US credit demand has disappointed in response – proving money demand is rate sensitive. The government could borrow more to offset (and it probably will) but that will raise yields further. Incidentally, the UK is one of the few governments pursuing mild fiscal discipline to decent effect, but markets just don’t think it will last beyond May’s local elections.

European assets were weighed down by higher energy prices last week, as well as Greenland threats. Natural gas futures spiked on fears that Trump could hold LNG shipments to ransom, and they stayed elevated even after Trump backed down on Greenland. Geopolitical crises can scar markets even if they change little in the short-term. Washington’s confrontational start to the year shines a light on the weak links in the 2026 outlook, particularly around bond yields and gas prices. Markets could do with some calm, but Trump is already talking about another US government shutdown. We won’t hold our beath.

Trump’s soft underbelly

If Europe wants to stop another Greenland crisis, it could help to focus on what American voters – Trump’s base in particular – care about. The majority are opposed to taking Greenland either by force of purchase (only Republicans are in favour of purchasing the territory) but that doesn’t necessarily mean it will be a big electoral issue in November’s midterms. Foreign policy usually only impacts US elections when there is a ‘boots on the ground’ war, which should at least soothe European fears about an invasion. However, affordability (importantly, not inflation) is Trump’s weakest issue with voters, so perhaps shouldn’t be surprised that the 10-25% tariff threats were dropped.

President Macron suggested the EU could use its anti-coercion instrument (ACI) in response to US threats – which would take months to pass but could seriously harm the US. US threats could also backfire on its bonds. Trump and US treasury secretary Bessent dismissed the idea that Europeans could dump US treasury bonds, but we see signs of international investors already reducing their US exposures. According to John Murillo of B2Broker, the ‘Sell America’ narrative is gaining traction, which could result in “higher bond yields, tighter financial conditions, and reduced liquidity for (US) businesses that rely on stable access to capital.”

We can question how much Trump listens to public or market opinion, but he does tend to back down when things threaten to get nasty for his base. That should motivate European leaders to be a little bolder in their responses. Canadian Prime Minister Mark Carney declared at Davos last week that western leaders shouldn’t mourn the old rules-based order because “nostalgia isn’t a strategy”. European leaders could learn something from this, as well as from China and Brazil’s forceful responses to past tariffs, which seems to have earned them more respect from Trump than the EU’s fairly quick acceptance of 15% tariffs.

US consumers and the wealth effect

JP Morgan traders think that US consumers have more cash than ever before, supporting US markets and the economy the same way ‘excess savings’ (a measure of the pandemic-era cash boost) did a few years ago. We’re not sure. We see this as a long-term savings offset to stocks.

JPM’s measure of the “Consumer Cash Pile” (checking and savings accounts, and money market funds) hit a record $22tn in Q3 2025. Almost all income cohorts have more cash in real terms than pre-pandemic, apart from the bottom 20% of earners. Liquid savings support not just consumption but US risk assets, by backing lending and reducing volatility.

However, the proportion of US household assets that are liquid is now at historical lows. Americans are putting their capital into higher risk and return assets like stocks. You could argue that’s a good thing – going hand in hand with the strength of US markets. Stocks are better investments than cash in savings accounts over the very long-term, and it helps an economy when domestic consumers are heavily invested in their own assets. But it also means US savers are taking on more risk than ever before, perhaps without even knowing it.

The higher proportion of equities also increases the wealth effect, tying US consumer demand ever tighter to the ups and downs of US stocks. For years, the outperformance of US stocks has helped US balance sheets, boosting consumption and economic growth – which feeds into corporate profits and back into US stocks. But what happens if the cycle reverses? US growth slowed into the end of 2025, coinciding with equity fund outflows. Large institutional investors are now diversifying their holdings away from the US too, due to political uncertainties. If this continues and the wealth effect reverses, profits will be under threat.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Marcus Blenkinsop

26^th January 2026

Please see below, an article from EPIC Investment Partners discussing the recent World Economic Forum in Davos and the implications for us as investors. Received today – 23/01/2026

While mainstream headlines remain fixated on the visible theatre of Davos, a deeper structural realignment is being engineered in the shadows of the 2026 World Economic Forum (WEF): the transition from universal globalism to a regime of minilateralism. This shift marks the quiet unwinding of the “Global Village” ideal, and the emergence of a world organised around selective, interoperable clubs of aligned nations and corporations, bound less by ideology than by functional advantage and execution speed.

For the EPIC Fixed Income strategy, positioned across pivotal hubs such as the UAE, Saudi Arabia, Qatar and Singapore, as well as resource-critical nodes like Chile and Mexico, this fragmentation is not a risk but a source of alpha. These states have moved decisively beyond passive participation in global trade. Instead, they are becoming architects of bespoke corridors, designing specialised digital, energy and green alliances that consciously bypass the inertia and consensus paralysis of legacy multilateral institutions.

This new order is underpinned by the rise of the Agentic Web: a decisive evolution from assistive AI towards autonomous digital agents capable of managing supply chains, allocating capital and negotiating trade at machine speed. Within this environment, the UAE, Saudi Arabia and Singapore have successfully repositioned themselves as Digital Sovereign Hubs, hosting trusted data spaces that enable high-velocity, low-friction transactions across jurisdictions. Qatar, meanwhile, has consolidated its role as the system’s critical mediator, providing the LNG energy bridge that, for example, simultaneously fuels Mexico’s industrial expansion and Chile’s green transition. By anchoring the physical energy plumbing of the Middle East, Qatar functions as the structural adhesive of these trade clubs, deploying sovereign wealth into private credit, payments and fintech infrastructure that forms the financial substrate of the Agentic Web.

China occupies the role of Grand Contrarian in this landscape. Publicly, it continues to champion “true” multilateralism; privately, it is constructing the world’s most formidable parallel club through the Industrial Internet. China has become the undisputed factory of the Agentic Web, supplying the hardware and machine-to-machine intelligence that power infrastructure in Riyadh and Abu Dhabi, while remaining the primary demand centre for Chile’s raw materials. China exerts the industrial gravity that prevents full global decoupling, even as it adapts domestic rules to attract capital from Singapore and the Gulf.

For holders of US Treasuries, this shift reinforces a defining paradox of the modern era. While hyper-efficient corridors unlock extraordinary productivity gains, the velocity of autonomous trading introduces a new class of systemic fragility. In the fragmented landscape of 2026, US Treasuries function as the ultimate liquidity hedge against algorithm-driven flash-crash risk. The global economy that emerges rewards investors who balance the offensive growth of Gulf and Asian hubs with the defensive stabiliser of the world’s reserve currency.

The WEF has, in effect, now provided a platform to digitise the “club”. The global winners will be those who secured their seat early, leveraging resource security alongside technological sovereignty, before the doors formally close.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Alex Kitteringham

23^rd January 2026

Please see the below article from EPIC Investment Partners detailing their thoughts on Donald Trump’s address at the World Economic Forum. Received this morning 22/01/2026.

At the World Economic Forum in Davos yesterday, Donald Trump’s address to the global elite sent a ripple through the polished forums of the Swiss Alps. Few came expecting geopolitical fireworks; many left unsettled. In a speech that explicitly linked American security guarantees to control of the High North, Mr Trump argued that the United States could no longer subsidise the defence of the region without holding the keys to the territory itself. He framed Greenland not as a distant ally but as strategic terrain the United States must secure. He insisted any solution must make both NATO and Washington “very happy’” dismissing the notion that allies could responsibly steward the island’s future without American leadership.

Those remarks elevated what had been a quixotic policy backwater into the realm of serious international crisis. Yet even as markets and capitals scrambled to price the risk, much of the commentary missed a basic point: the United States already occupies the strategic high ground in the Arctic. Under the 1951 defence agreement, Washington enjoys effectively unrestricted access to Greenland’s airspace and waters and operates the island’s most critical military installation, a linchpin of US missile defence and early-warning systems, without paying rent. The American presence is entrenched. An invasion would amount to a hostile takeover of an asset already under operational control.

This is why the fixation on “invasion” is a distraction. The noise from Washington is not about seizing land from Denmark; it is about freezing politics in Nuuk. The real object of American concern is not Copenhagen, long a broadly compliant intermediary, but Greenland’s independence movement. For decades, western capitals treated the prospect of sovereignty with indulgent sympathy, a neat expression of self-determination that could be absorbed into the existing security order. That assumption has now collapsed.

From Washington’s perspective, the danger is not that Greenland remains Danish, but that it ceases to be so. Denmark provides a geopolitical wrapper that matters far more than it appears. Copenhagen absorbs fiscal costs, administers governance and diplomacy, and supplies a legal shield that keeps rival powers at bay. As long as Greenland sits within the Danish kingdom, it is not a free agent. That arrangement has suited the United States perfectly.

Remove that wrapper and the arithmetic changes abruptly. An independent Greenland would be a sovereign state of fewer than 60,000 people occupying some of the most valuable strategic geography on the planet. It would inherit the right to choose its partners and negotiate access, but also a large fiscal gap: Danish transfers cover roughly half of public spending. Independence without replacement revenue would mean immediate economic strain.

The nightmare scenario in Washington is not a hostile Greenland, but a transactional one. A sovereign Nuuk could reasonably ask why the United States pays nothing for facilities underpinning its nuclear deterrent and space surveillance. It might treat the American presence as an asset to be monetised, or invite alternatives from Beijing offering infrastructure or mining investment with obvious dual-use potential. Seen this way, the rhetoric from Davos looks less like imperial impulse and more like pre-emption.

Denmark is left squeezed between American security imperatives and Greenlandic aspirations. The irony is stark: a movement seeking to escape one colonial legacy may have invited a far more powerful overlord. The tragedy is not the threat of war, but the narrowing of choice. The United States does not need to invade to get what it wants; it simply needs to ensure that no one else ever gets the chance to pay the rent.

Please continue to check our blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses.

Andrew Lloyd

22/01/2026

Please see this week’s Markets in a Minute update below from Brewin Dolphin, received yesterday afternoon – 20/01/2026.  

U.S. inflation remains above target

U.S. inflation data came in below expectation, but remains higher than the Federal Reserve’s desired 2% limit.

Worlds apart: Trump challenges Denmark and Iran

Source: LSEG Datastream

For another week, U.S. President Donald Trump’s rhetoric dominated the news, with some headlines explicitly moving markets while others were more subtle. However, there can be no question that the generally chaotic tone and the challenging of norms are causing investors to change the way they deploy capital.

Defence stocks remain in focus and were jostled by two key themes.

Firstly, President Trump has threatened the Iranian regime with military action if its efforts to repress local protests are not tempered, a requirement the regime will find difficult to meet.

Secondly, Trump has continued with assertive rhetoric and candour over his now, very public, desire to assimilate Greenland into the U.S., and his refusal to rule out the use of force. While the prospect of this leading directly to significant military action seems remote, it does emphasise the new vulnerability NATO members are likely to feel over the protection which the alliance had previously afforded them. The logical conclusion is that countries need to develop and invest in their own military capabilities.

President Trump’s recent emphasis on military-focused measures has followed last year’s focus on economic measures, most notably tariffs. However, many of those measures are now in doubt. So far, the Supreme Court of the United States (SCOTUS) has been expected to produce an opinion on this topic twice this year, but as yet, no opinion has been forthcoming.

We have a better idea over the timing of President Trump’s assault on monetary policy because the Court is due to hear oral arguments in the case of Lisa Cook, the Federal Reserve (the Fed) governor, whom President Trump would like to dismiss.

The case is over whether the discrepancies on her mortgage application were an oversight or a fraud, but the reason for bringing the case to SCOTUS is that the president would like to influence monetary policy by placing his own nominees on the Federal Open Markets Committee, which sets interest rates.

Wednesday’s oral arguments should give an indication of whether SCOTUS is planning to rule on the individual case or the broader issue of whether the president has the power to fire members of the Fed’s board. If the court tackles the wider case and rules in the president’s favour, it’ll have significant impact on monetary policy, effectively handing him de facto control. It would mean lower interest rates and a weaker dollar.

U.S. inflation remains higher than desired

Source: LSEG Datastream

Until inflation hits target, the Fed will react to economic data, such as last week’s U.S. inflation report.

The president’s preference for lower interest rates was helped by the unexpectedly weak U.S. core Consumer Price Index (CPI) inflation. While lower than expected, inflation remains slightly above target. There remains some evidence of tariffs affecting inflation, but it isn’t vast and it’s tended to be overshadowed by weakness in other categories like used cars this month. Shelter costs should keep overall inflation restrained but core services remain a little high.

This makes the case for further interest rate cuts difficult to make right now, and so rates are expected to remain on hold until the summer (June or July). Much will depend upon the outlook for the labour market, which for now appears to be treading water.

Positive results from U.S. banks

Source: LSEG Datastream

Economic data can only tell you so much. At the start of the new earnings season, a lot of focus is on the banks to see what they can tell us about their own businesses and the state of the broader economy. Last year was a great one for banks, with the interest rate environment broadly supportive, companies doing large deals, a big increase in corporate borrowing, and plenty of market upheaval to trade through, even if the final quarter saw some moderation in these trends.

According to the banks, the economy is in good shape, with consumers spending and businesses investing. The short-term outlook remains positive even while the protective institutions of the U.S. economy and global community come under pressure from a disruptive president.

Please continue to check our blog content for advice, planning issues and the latest investment market and economic updates from leading investment houses.

Charlotte Clarke

21/01/2026

Please see the below article from EPIC Investment Partners detailing their discussions on the UK re-joining the EU Customs Union and single market. Received this morning 20/01/2026.

Labour MPs and leadership hopefuls are being dragged towards the UK rejoining the EU Customs Union and single market by the voices of the Lib Dems and Greens. These parties think much closer ties to the EU would be good for business and trade. This note looks at what would happen if the UK adopted either or both of these choices. Those in favour argue that the UK trades more with the EU than with any single country. Those who disagree point out that 59% of UK trade is non-EU, with the US as the most important single market. This non-EU trade has been growing faster than EU trade in recent years.

When the UK left the EU Customs Union at the end of 2020 the government removed all tariffs on raw materials and components that UK manufacturers import from non-EU countries all round the world. This amounts to some £30 bn of imports. It took tariffs down to zero on 650 product lines in machinery, electronics and tools, and 20 lines of metals and metal products. The EU imposes tariffs on these items partly because they receive most of the revenue from customs dues or tariffs, but they are also protecting EU companies from more intense global price competition.

The UK government also removed all tariffs on items the UK cannot produce or grow for itself, covering another £10bn of imports and including various food and textile product lines. In total the UK took tariffs off 2,000 product lines. 91% of the UK’s imports of goods are now tariff-free thanks to these reductions and to the various free trade agreements negotiated with the EU, TPP, India and many others. As the government said at the time in 2021 “The UK General Tariff almost doubles the number of tariff lines that have zero import tariffs (compared to the EU tariff the UK used before)”.

Were the UK to rejoin the Customs Union it would need to amend or rescind the free trade deals with the Transpacific Partnership, India, Australia and New Zealand because they would break EU rules. Some say these deals do not add much to UK GDP so their loss would have limited impact. By the same logic you could say a new trade deal with the EU would not add much to UK GDP, especially as the UK already has a free trade deal with no tariffs. The new trade deals the UK has negotiated since leaving, and the rolled over EU trade deals now renegotiated, have highlighted a number of opportunities particularly for services.

The case for rejoining is based around trade in goods. The proponents hope there will be advantages in less bureaucracy if the UK adopts EU rules and customs levels. This will not always be the case. The EU, for example, has the Meursing table for tariffs on certain foods, with 13,000 varied tariffs depending on the milk and sugar content of food products. The UK has dropped use of this table and gone for a much simpler tariff structure on biscuits, confectionery and spreads with fewer rates. The government is seeking EU agreement on rules covering animal products to see if the complexity and frequency of veterinary inspections can be reduced.

56% of UK exports are services. Services are the fastest growing part of UK trade, and they are much bigger with non-EU countries than with the EU. There are no tariffs on services. The new UK trade deals struck after Brexit have chapters dealing with services, which EU trade deals either left out or changed very little. Looking ahead the UK needs greater liberalisation of services to reinforce this dominant and fastest growing part of the country’s exports.

Aligning the UK with single market rules brings some downside as well as upside. The government is keen to join the EU electricity trading and carbon emissions scheme. This will put up the UK carbon tax level to align with the higher EU one. This would push energy costs higher at a time when the government says it wants to get energy bills down and to ease the pressures on the cost of living.

Aligning with EU rules on dairy and meat as the UK did in the EU might not produce the improvement in UK output the government wishes. During the UK’s time in the Common Agricultural Policy the UK was short of milk quota, restricting the growth of value-added milk-based products in the UK. It fell into difficulties with health controls on beef where an EU ban on sales was extended beyond the time UK experts thought necessary. Part of the price of a possible deal has been the UK offer of 12 more years of high quotas of UK fish for continental boats, delaying new policies to restore the size of the former UK fishing fleet.

The government thinks it can negotiate less bureaucracy for farm exports and for matters like music visits by UK orchestras and choirs abroad. It is looking at possible mutual recognition of professional qualifications between the continent and UK and is seeking to rejoin the Erasmus student scheme. They have not clarified whether this entails scrapping the cheaper UK Turing scheme which gives grants to UK students to study abroad but does not give grants to EU students to come to the UK as Erasmus does. Erasmus only allows students to go to EU Colleges.

Any possible reset the UK agrees and implements is unlikely to make much difference to exports or growth. The concessions the UK are seeking will have a modest impact, and will come with UK payments to the EU, the adoption of more EU laws and an end to freedom to negotiate better deals with the rest of the world. The government seems to have ruled out joining the Customs Union and is more likely to align more rules and practices with the single market than to go for full membership. However, if the enhancement of growth is the core driver for closer ties with the EU, it is unclear how this would manifest itself and over what timeframe.

Please continue to check our blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses.

Alex Clare

20/01/2026