Welcome to our monthly briefing, where we provide a comprehensive analysis of recent economic events and their implications for the financial markets. Highlights from January’s briefing:
- Small cap stocks outperformed large caps, value stocks beat growth stocks, and emerging markets led returns, defying recent years’ patterns. Contributing factors included worries about AI overbuilding, Federal Reserve independence, and valuation disparities between U.S. and non-U.S. markets.
- Large cap growth stocks, especially in the tech sector, lagged behind other segments due to concerns about when AI optimism would translate into earnings growth.
- A weaker U.S. dollar enhanced foreign stock returns for U.S. investors, boosting emerging market investments significantly, as investors sought diversification away from the U.S. market.
- In the coming months, the One Big Beautiful Bill tax cuts are anticipated to raise household incomes and lower business tax liabilities, increasing spending and offering near‑term support to growth in early 2026.
Read the January 2026 Monthly Briefing for insights from Chief Market Strategist Julie Biel, CFA
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