Market Commentary - January 2026
We hope the recent holiday season included time spent with loved ones, and we wish everyone a restful and healthy start to 2026.
Despite the intense volatility towards the end of the first quarter, global markets rebounded throughout the remainder of the year, with equities delivering solid gains in 2025. For only the fourth time in the last fifteen years, international equities outperformed their U.S. counterparts. This was a notable shift in investor behavior, driven in part by the decline in the U.S. dollar as well as diversification opportunities in other segments of the world.
Looking across other segments of the market, spreads within the fixed income market remained tight throughout much of 2025 with little change in the yield curve, leading to positive but modest returns. Precious metals outperformed for much of the year, driven primarily by continued expectations around rate cuts and overall debasement of the U.S. dollar. Energy prices declined throughout the year, although most other commodities have seen a pickup in recent months.
We have highlighted some notable economic expectations and estimates, some of which will surely impact overall market conditions in 2026. Please note that these are point in time estimates and will constantly evolve over the coming months.
Corporate Earnings
Forward earnings estimates for S&P 500 companies have generally been rising. Earnings are currently anticipated to rise by 15% in 2026 following an expected 12% increase in 2025 (prior to the upcoming Q4 reporting season). Profit growth, driven by both revenue growth and continued margin expansion, is expected to be a key driver of returns rather than valuation expansion.
Inflation
Headline inflation is expected to moderate over the coming quarters to the mid- to low- 2% range, driven by productivity gains and stagnant wage growth.
Fiscal Policy
Expansionary fiscal policy in the United States and parts of Europe is expected to remain a key growth driver in 2026, with increased government spending supporting demand. Tax incentives and fiscal spending are likely to play a role in stimulating corporate investment and consumer activity. Most of the impact from the tax bill passed in mid-2025 will flow through to the economy throughout 2026.
Monetary Policy
Central banks in major developed economies, particularly in the United States, are anticipated to continue to shift toward more accommodative stances. The U.S. Federal Reserve is likely to cut rates gradually as inflation moderates and employment remains stagnant. We are closely monitoring the upcoming change in leadership at the Federal Reserve, which will happen in the first half of 2026.
Global Liquidity
Liquidity conditions are expected to improve in 2026 as central bank balance sheets expand and accommodative fiscal and monetary policies converge. The declining value of the U.S. dollar, the lagged impact from declining oil prices, and lower interest rate volatility should also be tailwinds to global liquidity.
Economic Growth
Bloomberg consensus U.S. GDP growth estimates currently hover around 2.0% for the 2026 calendar year. While risks are always present (e.g., geopolitical events, capital expenditures, investor sentiment, policy uncertainty, etc.), growth may surprise to the upside during the coming year given the aforementioned tailwinds and fiscal spending.
2025 capped a year of dynamic markets shaped by policy shifts, global rotations, and continued technology leadership. Looking into 2026, we anticipate continued growth, moderating inflation, and supportive fiscal and monetary environments. Now more than ever, we emphasize strategic diversification (and rebalancing), along with an acute focus on assets and segments set to benefit from the continued dollar debasement theme that has persisted and continues to intensify. As with all cycles, this one will turn at some point, and we will continue to discuss risk management and cash planning as we meet with families throughout 2026.
Firm Updates
Thanks to your continued partnership, our firm has grown over 25% during the past year. As most referrals come from existing clients, we thank everyone for the introductions made throughout the year. We are enthusiastic about the depth of the planning and engagement we have with families, and we are grateful for your continued trust and support.
We are also excited to share that Jason, his wife Lauren, and daughter Estelle welcomed twin girls to their family! Presley and Penelope Viola were born in October, and all are happy and healthy.
We look forward to many conversations and updates throughout the coming months and wish everyone a Happy New Year.
- Jason, Micah, Tim, & Victoria