Buckle up we may be in for some turbulence

I don’t think it will come as much of a surprise to those who follow stock markets that global indexes are heading south this morning, as geopolitics and the battle over Greenland are on the front page of every newspaper. Over the weekend, events took a sharp turn after Donald Trump threatened to impose new tariffs on imports from eight nations, including the UK, that oppose his attempt to annex Greenland.  In a tit for tat move, the EU was weighing up retaliatory tariffs on American goods and even deploying serious economic sanctions against the US. We shall see in the coming days whether TACO man reappears and the situation de-escalates; one never knows with President Trump, but the odds are that he will.

We have commented that the early 2026 stock rally has led to a somewhat greedy mentality amongst the investment community, and that a period of consolidation was likely. That time has probably come, as always, it’s not from a quarter one would normally have anticipated.

Back to more mundane events, earnings season will be important this week as we get 4th-quarter numbers from industries across the board, including Johnson & Johnson, Netflix, MMM, Visa, Intel, and Procter & Gamble, to name but a few.

It is also an important week for the UK economy, on Tuesday, we get the latest UK employment data. The unemployment rate is expected to remain around 5%, and average earnings are forecast to fall back a bit from 4.6% to 4.4%. On Wednesday, we get a raft of UK inflation data; the headline rate is expected to show a rebound from last month’s 3.2% to closer to 3.5% as food price inflation is expected to rise. On Friday, we get the latest retail sales data, and on Thursday, we get the latest government borrowing data.

We have to wait until Thursday for the latest US economic data dump, which includes another estimate of the 3rd-quarter US GDP. Unless there is a major adjustment that’s unlikely to move the needle, what may do so is the PCE inflation numbers for November. Analysts are forecasting a modest dip in the year-over-year rate from 2.8% to 2.7%. We also get the latest jobless claims report.

At the end of the week, the flash PMI data for the US, eurozone, Japan, UK, India, and Australia will be updated on Friday, 23 January. The surveys will provide insights into economic growth, inflation, and labour market trends for January. We shall see if the slower growth trends observed in December continued into the start of 2026.

 China announced this morning that it met its 5% GDP target for 2025, despite Q4 GDP growth slowing to 4.5% year over year. Global indexes are indicating a decline of around 1% at the open.