It’s still too early to draw conclusions about how or if the new year will differ from 2025 from a US equity market perspective. But a possible early clue that a shift is underway can be gleaned from reviewing performances for US equity factors so far in 2026.
Will Markets React To The US Investigation Of Fed’s Powell?
Another week, and another new risk factor to digest. This time it’s a sharp escalation in President Donald Trump’s struggle with the Federal Reserve, which critics charge is a thinly-veiled effort to force the central bank to lower interest rates.
Book Bits: 10 January 2026
● Blood and Treasure: The Economics of Conflict from the Vikings to the Modern Era
Duncan Weldon
Review via The Economist
Of all human activities, war is the least rational. It costs a fortune. It spreads death and misery, from the killing fields of Sudan to the tunnels of Gaza. It is often started out of personal hubris or blind patriotic zeal: think of Napoleon’s invasion of Russia or Japan’s decision in 1941 to provoke a war with a superpower it could not hope to defeat. So you might think economics—a discipline associated with rational self-interest—would have little to say about it. You would be wrong, argues Duncan Weldon, a former writer for and occasional contributor to The Economist, in “Blood and Treasure”.
Research Review | 9 January 2026 | Tariffs and Trade Wars
Tariff Pass-through into Retail Prices: Measurement, Replacement, and Shrink-flation
Liang Bai (King’s College London), et al.
December 2025
To what extent do import tariffs pass-through into retail prices? Existing estimates for the U.S.-China trade war present a puzzle: pass-through into U.S. border prices was complete with seemingly no effect on retail prices. We combine barcode country-of-origin data with retail scanner data to address this apparent discrepancy in the context of consumer goods. Within barcodes, tariff pass-through into retail prices is 14%, yet pass-through into aggregated price per unit weight is 44%. This discrepancy is attributable to product replacement bias: pass-through occurs predominantly via product turn-over towards barcodes with smaller package size, even within narrow firm-product combinations. Confidence intervals overlap considerably with existing estimates of the foreign cost share of U.S. retail imports, which we validate, such that we cannot reject full tariff pass-through into retail prices.
Will The Supreme Court Rule Against Trump’s Tariffs?
The answer is pending as early as tomorrow (Friday, Jan. 9), when the High Court is expected to issue rulings, which could include a decision on the legality of President Trump’s global tariffs. Hanging in the balance: the potential for billions of dollars in tariff refunds, along with a major setback for Trump’s use of presidential authority over trade policy. Add in a hefty dose of confusion about the implications for markets and the economy and it’s clear that Supreme Court’s decision on tariffs could be a significant event that reverberates through the months and years ahead.
Markets Barely Blink After US Removes Venezuela’s Maduro
The news was certainly dramatic. But financial and commodity markets have shrugged following the news that the US, in a daring raid on Saturday, captured Nicolás Maduro, Venezuela’s president, and brought him to New York to stand trial on drugs and weapons charges.
US Economy Expected To Cool In Q4, Based On Latest Nowcasts
After two straight quarters of strong growth, US economic output is on track to downshift in the upcoming report on 2025’s fourth quarter, according to the median estimate for a set of GDP nowcasts compiled by CapitalSpectator.com. The expected growth downgrade is substantial, but is unlikely to trigger a recession warning, based on the current numbers.
Total Return Forecasts: Major Asset Classes | 5 January 2026
Long-term expectations for the Global Market Index (GMI) remained steady at a 7%-plus pace for the annualized total return outlook, based on data analytics through December. The forecast has been relatively stable at this level recently, rising fractionally over last month’s estimate.
Book Bits: 4 January 2026
● The Web Beneath the Waves: The Fragile Cables that Connect our World
Samanth Subramanian
Review via Los Angeles Review of Books
Nearly twenty years ago, during a congressional debate over net neutrality, Senator Ted Stevens of Alaska described the internet as a “series of tubes.” The remark became an instant meme, a rhetorical relic that suggested an antediluvian age when telecommunications depended on switchboard operators, wires, and cables.
In retrospect, Stevens’s statement was far from absurd. For, as Samanth Subramanian’s excellent new book The Web Beneath the Waves: The Fragile Cables That Connect Our World makes clear, the internet does indeed consist (at least in part) of a vast network of glass tubes—fiber-optic cables. We think of the internet as an abstraction, a view reflected in the lexicon of the data economy—the cloud, AirDrop, even the Ethernet cable. But, though cyberspace may be virtual, it relies on earthly infrastructure. The apparent weightlessness of the internet depends on very physical cables, the most important of which run deep under the world’s oceans. Ninety-nine percent of the world’s data zips through these filaments, which are only three inches wide. These threads on the seafloor are the world’s information superhighways. They are also tremendously fragile, exposed to natural disaster, marine accident, and sabotage. Indeed, the most vulnerable part of the global data infrastructure may well be the part that has been submerged.
Major Asset Classes | December 2025 | Performance Review
Global markets endured a volatile run in 2025, but when the last trades closed on Dec. 31 all the major asset classes posted gains for the year, based on a set of ETFs. As a result, outperforming passive global asset allocation strategies was unusually difficult in 2025… again. All the more so for portfolios that were heavily weighted in US assets and downplayed international diversification.