Weekly Notes from Tim
By Tim Holland, CFA, Chief Investment Officer
- Last week was a volatile one for US markets, as equities fell sharply Tuesday on news the Trump Administration would implement a 10% tariff on European nations opposed to its purchase of Greenland. We think the point of maximum concern was around whether the US would use military force to take the island if it wasn’t able to buy it from Denmark. Then, President Trump both ruled out force and announced a framework had been agreed to concerning Greenland that would satisfy US interests while keeping it an autonomous territory of the Kingdom of Denmark. Stocks rallied sharply on the news.
- We don’t want to debate the Trump Administration’s interest in Greenland or its approach to securing access to the island in this note; we do want to look at the US / Greenland issue through the prism of policy uncertainty, the idea global investors have become less enamored with the US and demand greater compensation for investing in US financial assets due to heightened uncertainty, a dynamic costing the US money most likely through a weaker dollar and higher bond yields.
- And it is true the US dollar per the ICE US Dollar Index has dropped a bit more than 5 points or 4.9% since Election Day 2024 (see chart); however, over that same time period the yield on the US 10 Year Note has dropped five basis points to 4.25% (it is worth noting many developed nations have seen yields on their bonds move up over the same time period). If we pick Inauguration Day 2025 as our jumping off point, the drop in the US dollar is more pronounced but so is the drop in US bond yields. Meanwhile, US equity markets are near all time highs and according to Trading Economics, Foreign Direct Investment in the US hit a record in Q2 of 2025 (meaning international companies continue to see the US as an attractive home for their capital). For now, we find it hard to say for certain that the US is paying any sort of “financial price” for the policy uncertainty it has helped manifest this past year or so.
- Market volatility, whatever its causes, is never fun, but it is part and parcel of investing. And for now, supported by strong earnings growth and an accommodative policy backdrop, the US bull market runs on.
Source: FactSet January 2026
Looking Back, Looking Ahead
By Ben Vaske, BFA, Manager, Investment Strategy
Last Week
Markets were volatile early in the week as renewed tariff threats toward the EU and uncertainty surrounding Greenland weighed on risk sentiment. Midweek, markets rebounded after President Trump announced that a framework agreement related to Greenland had been reached and that tariffs would not be implemented. That reversal helped stabilize markets after a sharp early selloff.
Commodities posted a very strong week. Natural gas surged 73% from the prior Friday’s close ahead of a major winter storm impacting large portions of the U.S. Precious metals also continued to rally amid heightened geopolitical risk. Silver gained 14.5% on the week and is up 44% just three weeks into the year, while gold continued to push toward $5,000 per ounce.
Economic data leaned supportive. Third quarter GDP was revised higher, PCE inflation came in below expectations, and weekly jobless claims ticked up modestly. Together, the data reinforced a picture of slowing but still resilient growth, setting the backdrop for this week’s Federal Reserve meeting.
This Week
The Federal Reserve takes center stage again with an interest rate decision on Wednesday. Markets have largely ruled out a rate cut at this meeting, with expectations firmly anchored on a hold. The focus will be on the FOMC’s statement and press conference for any shift in messaging around the current expectation of one cut in 2026.
Four of the Magnificent Seven report corporate earnings this week, including Microsoft, Apple, Meta, and Tesla, alongside several telecommunications and payment processing companies.
Economic data will also be in focus, particularly reports tied to business activity such as durable goods orders, the trade deficit, and PPI.
Looking ahead, growth expectations remain elevated. The Atlanta Fed GDPNow model currently estimates Q4 GDP at 5.4%, up slightly from last week, driven largely by net exports.
We hope you have a great week. If there’s anything we can do to help you, please feel free to reach out to ben.vaske@orion.com or opsresearch@orion.com.