Stock Market Updates, AI, Geopolitical Updates + MORE!
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What happened this week?
The Stock Market Dodges Bullets: “The stock market has not flinched in the face of such outrage, because it has kept firmly focused on business profitability. In fact, corporate earnings growth has kept on humming, only a few specific parts of the economy - like the auto and construction industries - being hit by higher interest rates.
The most dangerous investments are the ones everyone believes are safe. Today, the largest passive funds in the world are sleepwalking into a market structure that is actively eroding investor security. The surge into passive ETFs has reached historic proportions, and the risks are being ignored—until they can’t be.
Artificial intelligence (AI) has clearly been a dominant market, economic and workflow theme over the past few years following the proliferation of large language models (LLMs). Many have started to use some AI tools in their day-to-day; many have not. Some believe it will change our world; some believe it is simply another technology tool to help us be more productive, perhaps with a financial bubble along the way. This ethos is not about how much compute we need and how we will power those data centres. It is about using AI.
We have called inflation “political kryptonite” because it is so damaging to politicians. ?Clearly, inflation played a role in the 2024 election. ?So now that President Trump sits in the Oval Office, his opponents have been trying hard to link anything and everything in his agenda to inflation.
European stocks are leading the global markets this year, with double-digit gains of over 11% as measured by the MSCI EMU (European Economic and Monetary Union) Index in U.S. dollars (USD). This more than doubles the total return of the S&P 500 Index at 4.6% year to date, adding to the outperformance by the MSCI EMU Index since the current bull market began in October 2022.
Events continue to unfold at a breakneck speed around the world, as the uprooting of the geopolitical and financial status quo remains relentless at only four weeks into the new administration.? It’s difficult to find a secure footing, as the ground keeps shifting underneath our feet.
Just recently, S&P Global released its 2026 earnings estimates, which, for lack of a better word, have gone parabolic. Such should not be surprising given the ongoing exuberance on Wall Street. As noted last week, correlations between all asset classes, whether international or emerging markets, gold or bitcoin, have all gone to one. Unsurprisingly, rationalizations justify illogic when too much money is chasing too few assets.
Dean LeBaron’s name may not be familiar to many readers, especially those who only began their careers in the 21st century. But?all of us should know who he is. Before there was even a term for it, Dean was the first truly successful quant. A legendary polymath, investor, and inventor, he has been a dear friend and mentor to me for almost a half-century. When he sent me his mini-memoir some time ago, I knew it deserved a wider audience.
Gold prices surged in time for Valentine’s Day this year, breaking through the significant US$2,900 mark for the first time. Fueled by safe-haven demand following President Donald Trump’s aggressive tariff talk—which is expected to extend to steel and aluminum imports in March—the rally is bringing more investor attention to the precious metal.
It’s been another tough week in the markets, with the S&P 500 falling 3.06%, while the NASDAQ Composite Index suffered the largest drop, down 4.89%. The Russell 2000 Index, which is heavy in small- and mid-cap stocks, also took a hit, down 4.12%, as market participants began losing their risk appetite.
Top Performing
Bottom Performing
This week, the investment industry witnessed several significant developments:
Apollo Global Management, in collaboration with State Street, introduced an exchange-traded fund (ETF) incorporating private credit assets. This innovative ETF aims to provide investors with daily liquidity while including traditionally illiquid private credit holdings. The U.S. Securities and Exchange Commission (SEC) has expressed concerns regarding the daily valuation of these private assets and the effectiveness of liquidity mechanisms under adverse conditions.
Richard Oldfield, CEO of Schroders, announced plans for a comprehensive restructuring of the 221-year-old British fund manager. The strategy focuses on cost reductions and expansion into growth areas such as wealth management and private markets. This move comes in response to pressure from the founding Schroder family, who hold a 44% stake, following a third consecutive year of stock declines.
Land Securities (Landsec), one of the UK's largest commercial landlords, revealed a strategic pivot from office investments to developing a substantial rental housing business. The company plans to divest its remaining retail and leisure parks, valued at approximately ￡800 million, and reduce its office investments by at least half upon completing current projects. The new focus includes developing over 6,000 homes in London and Manchester, aiming for an annual rental income of ￡200 million.
The SEC, under the current administration, has shifted its approach to cryptocurrency regulation by restructuring its crypto division and forming a "crypto task force" to establish clear guidelines. This change has led to the suspension or dismissal of lawsuits against major crypto entities, including Binance and Coinbase. The regulatory overhaul aims to foster innovation while protecting investors, though some critics warn it may reduce industry oversight.
Jupiter Fund Management experienced substantial investor withdrawals totaling ￡10.3 billion over the past year, primarily following the departure of prominent fund manager Ben Whitmore. Despite a 13% reduction in assets under management to ￡45.3 billion and a 7% decline in annual profit to ￡97.5 million, CEO Matthew Beesley remains optimistic about long-term growth prospects.
#TBT to a Must-Listen Conversation on Market Surprises ????On Raise Your Average, David Burrows, Chairman and CIO at Barometer Capital Management dropped some serious market insights that every investor should hear.??
“You could make money in some of the most difficult markets if you found the right groups…”Burrows breaks down why value stocks—especially in basic materials and energy—are as cheap as ever, and how structural deficits could actually fuel a surprise leg higher. With hedge managers heavily betting on collapse, is the real shocker that markets won’t go lower?
If you’re navigating today’s market volatility, this episode is a goldmine???
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