Last week: 2025 ended on a strong note; 2026 started on a positive note too; last FOMC minutes showed additional cuts
WEEKLY TRENDS
2025 was the year of strong performance for stocks, metals and somewhat Bonds too, with BTC and Oil lagging behind. Stocks showed their 3rd consecutive year with positive return, including record highs for most of the indices, and despite shocking US tariffs imposed by Trump but benefiting from a new Central Banks rate cut cycle (bar Japan)
Oil fell by 21% last year, despite geopolitical tensions in the Middle East, RU/UA, Iran, Venezuela, but global demand concerns and larger production, had both the better of it (OPEC+ rose their production by 2.9m bpd since April 2025 while US kept a stable but strong production already)
On the contrary, Metals had their best year in 2025, with Silver topping it at +145% (strong demand, metal less produced than Gold which progressed itself by +65% in 2025, benefitting from the ‘debasement trade’). Copper ended the year with +45% (pushed by AI and Data Centres and production obstacles in Chili, RDC and Indonesia)
2025 was a year of Central Bank rate cuts (except for Japan) with the FED reducing its Fed Fund rate 3 times and the ECB reducing its repo rate 4 times
US Tech returns: Alphabet (+65%), Broadcom (+50%), Nvidia (+39%), Tesla (+15%), Microsoft (+15%), Meta (+12%), Apple (+9%)
Rates
US curve steepening (2-10 years) higher at 72bps (+5bps)
HY corp. spreads lower with US at +280bps (-5); EU at +270bps (+5)
Commodities
Oil price higher (+1%) after a volatile year-end week (RU/UA peace talks)
Gold price lower (-4.5%) - take profits again at the $4400 level
Crypto
BTC higher (+3%) managing to break above the $90k mark but remained fragile with a YTD return of -5% after having reached a record high of
US
Last FOMC minutes (most officials are expecting additional rate cuts)
Under the watch
France will be borrowing €310bn in 2026 (a new record) representing 10% of its GDP and bringing its debts to a total of €3500bn
Nota Bene
Bulgaria adopts the Euro Jan 1st, leaving just 6 countries within the UE not to have adopted the single currency (Denmark, Hungary, Czech rep, Poland, Romania and Sweden)
Global Equity returns in 2025: South Korea +95%, Peru +87%, Spain +78%, Poland +77%, Greece +76%, South Africa +75%, Austria +74%, Colombia +69%, Vietnam +66%, Chile +65%, Italy +55%, Mexico +53%, Finland +53%, Brazil +49%, Israel +45%, Sweden +36%, Canada +35%
CALENDAR
Markets closed: 29-31 JanChinese New Year
Macro releases: USNFP Dec job report (9 Jan)
Central Bank rate decisions: FED/FOMC (28 Jan)
WHAT ANALYSTS SAY
Goldman Sachs: Family Office report 2025
BlackRock: Big calls for 2026
BlackRock: Tactical granular views
Goldman Sachs, 28 December 2025
Author: Goldman Sachs FO
Goldman Sachs family office clients: 245 family offices, 67% with > $1 billion
Top 5 Target Asset Allocation increase in the next 12 m: Private Equity, Public Market Equities, Private Credit, Hedge Funds, Infrastructure
Top 3 Alternative Investments Direct : Private Real Estate, Growth, Venture Capital
Top 3 Alternative Investments via Managers : Buyout, Growth, Venture Capital
Top 3 Sectors Overweight in next 12 months: Technology, Healthcare, Energy / Materials
Asset allocation in 2025:
Public Market Equities – 31%; Cash & Cash Equivalents – 12%; Fixed Income – 11%; *Private Equity – 21%; Real Estate & Infrastructure – 11%; Hedge Funds – 6%; Private Credit – 4%; Commodities – 1%; Other – 3%
*Private Equity – 21% of Portfolio: Buyout – 9%; Growth – 6%; Venture Capital – 6%; Other – 1%
Fixed Income portfolio average duration:
< 1 year – 7%; 1 to 2 years – 22%; 3 to 5 years – 57%; 6 to 7 years – 10%; > 8 years – 5%
Size of Investment Team: Less than 5 employees – 62%: 5 to 10 employees – 28%; 11 to 20 employees – 5%; > 20 employees – 2%
Size of Operational Team: Less than 5 employees – 52%; 5 to 10 employees – 28%; 11 to 20 employees – 9%; > 20 employees – 7%
BlackRock Investment Institute, 2 December 2025
Authors: Jean Boivin, Head BlackRock Investment Institute; Wei Li, Global Chief Investment Strategist
We stay overweight U.S. stocks on the broadening AI theme, with risk appetite supported by Fed rate cuts. The AI theme has broadened out this year, benefiting a wider array of markets including China, Taiwan and South Korea. Europe’s lagging earnings growth relative to the U.S. keeps us neutral its stocks, but we prefer sectors such as financials and industrials. Japanese stocks are one of our preferred tactical and strategic exposures. Solid economic growth and shareholder-friendly reforms underpin our overweight. We’re underweight Japanese government bonds – and DM long-dated bonds broadly. We prefer EM hard-currency debt on attractive carry, limited issuance and healthy sovereign balance sheets. We think India offers one of the most compelling opportunities across emerging markets for long-term investors looking to tap into mega forces. We favor above-benchmark allocations to Indian equities within strategic portfolios with investment horizons of five years and beyond. Demographics are India’s greatest long-term strength, in our view: a large and expanding working-age population, unlike many major economies, bode well for sustained gains in productivity and consumption, we think.
Tactical Reasons
Still favor AI • We see the AI theme supported by strong earnings, resilient profit margins and healthy balance sheets at large listed tech companies. Continued Fed easing into 2026 and reduced policy uncertainty underpin our overweight to U.S. equities.
Select international exposures • We like Japanese equities on strong nominal growth and corporate governance reforms. We stay selective in European equities, favoring financials, utilities and healthcare. In fixed income, we prefer EM due to improved economic resilience and disciplined fiscal and monetary policy.
Evolving diversifiers • We suggest looking for a “plan B” portfolio hedge as long-dated U.S. Treasuries no longer provide portfolio ballast – and to mind potential sentiment shifts. We like gold as a tactical play with idiosyncratic drivers but don’t see it as a long-term portfolio hedge.
Strategic Reasons
Portfolio construction • We favor a scenario-based approach as we learn more about AI winners and losers. We lean on private markets and hedge funds for idiosyncratic return and to anchor portfolios in mega forces.
Infrastructure equity and private credit • We find infrastructure equity valuations attractive and mega forces underpinning structural demand. We still like private credit but see dispersion ahead – highlighting the importance of manager selection.
Beyond market cap benchmarks • We get granular in public markets. We favor DM government bonds outside the U.S. Within equities, we favor EM over DM yet get selective in both. In EM, we like India which sits at the intersection of mega forces. In DM, we like Japan as mild inflation and corporate reforms brighten the outlook.
Equities
US overweight. Strong earnings, driven by AI, supported by continued FED easing, economic optimism, less policy uncertainty.
Europe neutral. We would need to see more business-friendly policy. We stay selective, favoring financials, utilities and healthcare.
UK neutral. Valuations remain attractive relative to the U.S., but we see few near-term catalysts to trigger a shift.
Japan overweight. Strong nominal GDP, healthy corporate capex and governance reforms – such as the decline of crossshareholdings
Emerging Markets neutral. Opportunities linked to AI, energy transition, supply chains benefiting countries like Mexico, Brazil and Vietnam.
China neutral. We like sectors like AI, automation and power generation. We still favor China tech within our neutral view.
Fixed Income
Short US treasuries neutral. Other assets offering more compelling returns as short-end yields have fallen alongside the U.S. policy rate.
Long US treasuries underweight. High debt servicing costs and price-sensitive domestic buyers pushing up on term premium.
Global Inflation-linked bonds neutral. inflation will settle above prepandemic levels, but markets may not price this in the nearterm
Euro area government bonds neutral. Current prices reflect increased German bond issuance. Prefer government bonds outside Germany.
UK gilts neutral. Recent budget aims to shore up market confidence but deferred borrowing cuts could bring back gilt market volatility.
Japanese government bonds underweight. Rate hikes, higher global term premium, heavy bond issuance will likely drive yields up further.
China government bonds neutral. Offer stability, diversification but DM yields are higher, sentiment shifting towards equities limits upside.
US agency MBS overweight. Offer higher income than Treasuries with similar risk, more diversification amid fiscal and inflationary pressures.
Short-term IG neutral. Spreads are low, but they could widen if issuance increases and investors rotate into U.S. Treasuries as the Fed cuts.
Long-term IG underweight. Prefer short-term bonds less exposed to interest rate risk over long-term bonds.
Global High Yield neutral. Offers attractive carry where growth is holding up, dispersion between higher and weaker issuers will increase.
Asia neutral. Recent
EM hard currency overweight. Weaker USD, lower US rates, EM improved economic resilience. Prefer high yield bonds.
EM local currency neutral. Weaker USD has boosted local currency EM debt, but it’s unclear if this weakening will persist.
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