It may have been a shortened trading week due to Monday’s holiday but there was no shortage of market moving news.

Surge in Japanese Bond Yields – Tuesday morning brought two main events, the first of which was a surge in Japanese Bond yields. They rose across all durations, with the 10 year JGB yield reaching levels not seen since 1999. The selloff came a day after Prime Minister Sanae Takaichi said she plans to dissolve parliament on Friday and call a snap election on Feb. 8, setting the stage for a campaign that is expected to focus heavily on economic policy. Rates moved higher due to a supply-demand imbalance but also due to repricing as the economy bets on a more expansionary/inflationary economy in Japan.

The rapid move rattled bond markets worldwide, and this rise in rates was made worse by the next event – new tariff threats from Trump. 

Trump Administration Actions – Tuesday’s other main event led to markets attempting to find their footing from the US presidential administration’s latest policy proclamations. Over the weekend, President Trump was once again targeting US control of Greenland and threatened tariffs on European members of NATO if they got in his way (an added 10% tariff on all goods sent to the US from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland). Markets quickly sold off as tariffs re-entered the picture and the future of Greenland hung in the balance

Trump appeared at the World Economic Forum in Davos on Wednesday, giving a long and meandering speech about many topics (including Greenland). During that speech, he removed the threat of use of force but did not remove tariff overhang. However, later in the day, it was announced that a framework had been reached with the Secretary of NATO and that tariffs were off the table as well. The details on the agreement are not yet known but it was enough for markets to regain all that had been lost earlier in the week

Supreme Court Timeline – The Supreme Court remains in session. While no rulings have been issued as of the date of this writing, it appears as though the Court may rule against President Trump’s effort to remove Fed Governor Lisa Cook. The Court has also yet to reach a conclusion on the legality of Trump’s 2025 tariffs

Earnings & Economic data – Beneath the surface and headlines, the companies that comprise markets continued to do well. With 10% of companies having reported, over 80% have beat expectations. There is a long way to go, but for now, earnings and growth are encouraging. Core PCE (Fed’s preferred measure of inflation) was also released and it came in line with expectations.

If you’re feeling a bit exhausted by the whipsaw action, you’re not alone. There is certainly a considerable amount of news and a 24/7 social media/news cycle the truly never sleeps. Now more than ever, a solid investment plan that takes into account a variety of outcomes is essential. Protect your portfolio (and your sanity) as much as possible!

Good thing it’s almost the weekend. Now most of us only need to deal with sub zero temperatures or potential snow/ice! Please stay safe and stay warm.

Onward we go,