It’s been an eventful start to 2026! Let’s look at a few things that happened so far this year:

Venezuela – In early January, US launched a military intervention in this oil-rich country and took its President into custody. The US has now taken over Venezuela’s oil industry. The oil is heavy crude which requires a large amount of refining. President Trump held a meeting with oil company executives last week to discuss a path forward for those resources. There is understandable hesitation given the costs to extract and refine this oil. Stay tuned to this interesting development as it has the potential to impact not only oil prices but also the operations and margins of oil companies/energy sector – and geopolitical dynamics.

Inflation Readings – we received reads on consumer and wholesale inflation this week. On the consumer side (Consumer Price Index), prices were 2.7% higher than the prior year and 0.24% higher than November. Grocery price increases were offset by lower increases in vehicle and appliance prices. The main surprise is that there does not seem to be a material impact of tariffs in these numbers. Inflation, while not yet zero, is coming closer to the Fed’s 2% target.

Wholesale price inflation, as measured by Producer Price Index, was in line with consensus. It was up 0.2% in the month. Core PPI—excluding food and energy—was flat and below the 0.2% estimate.

As we’ve been discussing, with inflation remaining steady (to falling), attention now turns to the other part of the Fed’s mandate – the weakening labor market.

Earnings – Earnings season began in earnest this week. Banks were in focus this week and for the most part, earnings were very strong with expectations being topped. It’s early – but of the 25 companies of the S&P 500 that have reported, 76% have beat expectations. We have a long way to go but expectations for earnings remain strong.

President’s Statements & Threatened Actions – Perhaps most jarring this week have been a series of presidential announcements, apparently aimed to address the dominant political issue amongst votes – the issue of affordability.

The President took aim at housing affordability, credit card rates, and interest rates, raising questions about the President’s thoughts towards big business and what industries may be next. Here’s a recap of the new trend of Washington picking winners – and losers.

Housing affordability – Trump took aim at private equity and other institutional buyers, calling to end their ability to buy single family homes. This is an effort to manage demand and therefore help lower housing prices

Credit card rates – Another announcement came last Friday, proclaiming that credit card companies should not be able to charge more than 10% interest for the next year. Without a doubt, credit card interest rates are punitive but they do provide important access to credit to otherwise “unbankable” credits. This issue has been brought up by the Senate in the past and failed to gain traction but it’s worth watching closely

Interest rates – Fed Chair Jerome Powell issued a rare video announcement Sunday in response to a grandy jury subpoena, threatening a criminal indictment related to his testimony last summer about the Federal Reserve headquarters. Powell implied the indictment was an attempt to influence the Fed. President Trump has not been shy about his strong desire for interest rates to be lowered. Fed independence is a key part of monetary policy – not just in the US but in any major economy.

As you can see, it’s been an eventful start to the year! As always, it’s important to focus on your individual investment plan and not get too swayed by the daily news cycle. Earnings, cash flows, interest rates, and overall sentiment will drive markets. For now, all those factors remain supportive. However, as the first two weeks have reminded us, uncertainty and unpredictability remain heightened. Act accordingly.

Onward we go,