All a gambler needs is a suitcase and a trunk, House of the rising sun.

So the first month goes, so the year goes, so they say. If that’s the case, we could be in for an interesting year. A volatile one with markets doing little at the end of it. The month has been dominated by the continual rotation away from growth toward value, from small caps to large caps, and Europe over the US. Basic materials have been the standout sector performance as commodity markets continue to rise. Gold is over $5000 an ounce, helped by a continuing weaker dollar.

Trump’s tariff threats seem to be creating less volatility than they once did. Trump has gone from being TACO man to TRFT man. Trump rarely follows through; it doesn’t quite have the same ring. The president slapped 25% tariffs on South Korea on Tuesday, and Asian markets barely batted an eyelid.

Japan has recently been dominating the news as the incumbent leadership engages in a pro-growth strategy, whilst inflation is running hot and deficits are high. This has led to a weaker yen and to moves by Japan and the US to support the currency. Always a mistake for governments to try to defend a currency; the markets always win in the end, just ask Norman Lamont.

Talking of currencies, sterling remains strong, partly because the dollar is weak overall, but to be fair, it has rallied against the euro. Does the market expect inflation to remain above the Bank’s target, thereby restricting its ability to cut rates? On Tuesday, the latest UK shop price inflation report from the British Retail Consortium showed a 1.5% year-on-year increase in January 2026, the highest level since February 2024 and well above expectations of a 0.7% increase. A combination of higher business energy costs and the good old National Insurance hike continued to feed through to prices.

Later today, we get the Fed interest rate decision, which will be no change. As per usual, we will wait to see what the Fed say about the path of future cuts. Also, we may hear if Mr Powell intends to stay on the committee when his term ends in May. The balance remains a mix of an uncertain employment outlook, inflation above target, the underlying economy in pretty good shape, managing Trump’s demands, and a weaker dollar, which in itself can be inflationary.

Tuesday saw a selection of more traditional names reporting earnings, including Kimberly-Clark, Boeing, UnitedHealth, and defence contractor Northrop Grumman. Wednesday, aside from the Fed, is the fun day: Microsoft, Meta, Tesla, IBM, ADP, Starbucks, and Lam Research, to name but a few of the more well-known names. Microsoft has bounced recently but remains 10% below its highs a few months ago.

Went to see the housemaid the other night, excellent, worth the entrance fee, twists and turns the whole way through.