January 2026 Market Commentary | OnePoint BFG Wealth Partners

Monthly Update

The global macro environment is just so fascinating right now I must say. So many moving parts with economics, geopolitics and politics all intertwining with markets and their broad asset classes of stocks, bonds, commodities and currencies. As the world is one big cobweb with so many interconnections we do our best to connect as many dots as we can. This said, markets are very dispassionate and the news only matters if it directly impacts growth and earnings in a material way.

The big sea change that occurred in 2025 was the broadening out of the markets both in the US and abroad. International stocks in particular had a big year, helped by the attractiveness of cheap valuations, combined with a weaker US dollar and a rebound in earnings growth. In the US, finally small and mid-cap stocks joined the large ones in moving higher too. I do believe we’re reaching a point where the big cap tech stocks as a group are losing some momentum and the group is beginning to splinter into perceived winners and losers as opposed to all rising in tandem. With the GenAI tech trade and the technology itself, investors are realizing that not everyone can win and that the massive amount of capital spending taking place does reduce profit margins and free cash flow.

If I’m right that big cap tech stocks are losing their dominance in terms of performance, we hope that international stocks and non-Mag 7 stocks can continue to garner attention after many years of being forgotten. The word ‘diversification’ is thrown around every day as a cliché but the current market conditions I believe warrant it and reflect the benefits by having it. On the other hand, the risk is that the US economy and stock market is so all-in with the GenAI tech trade and data center buildout that any faltering with either could have broader market and economic implications. Something we’re watching closely. The data center buildout will continue aggressively in 2026 and 2027,7 but we watch for any modifications in the rate of change. I’ve seen estimates that about 45%1 of the GDP growth in the first three quarters of 2025 was driven by this construction.

I think interest rates are going to be a big deal again in 2026 as on the day I write this the Reserve Bank of Australia joined the Bank of Japan in raising interest rates, now the only two developed central banks that are doing so. The shift of the RBA to now hiking after cutting in response to still elevated inflation is noteworthy. Other central banks are either on hold or contemplating when to cut rates again next, like the Fed. Either way with the short end of the curve, long term interest rates around the developed world continue to be elevated and rising. Also,lso on the day I write this, the German 30 yr2 bund yield is rising to the highest level since 2011even though the European Central Bank has cut interest rates by 2003 basis points over the past 1 ½4 years. JGB long term bond yields are just off the highest levels seen in decades. Also, notwithstanding 1755 basis points of rate cuts by the Federal Reserve, US 10 yr6 and 30yr7 yields are remaining higher and near levels last seen last summer.

I believe we’re in a time where excessive debts and deficits now matter in the eyes of bond investors and there is also maybe still a reluctance to take on too much duration due to lingering inflation and cost pressures. What this means too is that central banks are becoming less influential in manipulating the yield curve outside of the short end. I will tie this behavior into the value of fiat currencies, particularly the US dollar, and gold. In the portfolios of central banks, gold continues to gain market share and now makes up about 30%8 of global reserve assets vs about18%9 at the end of 2024. The US dollar’s market share is down to 38%10 from 50%11 at the end of December 2024.

With respect to gold, the central bank demand should continue as dollar diversification rolls on and gold is also becoming a settlement currency with more global transactions taking place outside of the US dollar system. For example, when China buys oil from Saudi Arabia, some of that is now denominated in renminbi. The Saudis in turn use that renminbi to buy products from China with any surplus finding its way back into gold.

With respect to the US economy, it remains very mixed with continued strength being driven by the buildout of the data centers around the country and everything that touches these huge buildings is benefiting. Everything from the chips and servers to the steel, cement makers to the HVAC providers, among many other things. Upper income spending is still robust with the help of the wealth effect impact from record highs in the stock market. The US federal government budget deficit of about $1.812 trillion is also providing economic stimulus. On the other hand, US manufacturing, housing, lower to middle income consumer spending and capital spending ex AI, have been more challenged. We hope that with respect to CapEx, the ability to immediately expense the investments, written into the Big Bill out of DC, will help generate more spending. At some point with manufacturing inventories will need to be rebuilt. Andd, a slowdown in the rate of home price appreciation could help spur more transactions and bring in more first-time buyers.

I’ll finish by mentioning the other big news in January and that was the announcement by President Trump that Kevin Warsh will be the next Fed Chair when Jay Powell’s term ends in May. Warsh was a Fed Governor in 2006-2011 and at the time was the youngest Governor ever to be appointed. Since then, he has been a consultant to the famous hedge fund manager Stan Druckenmiller who has been running his family office. I believe Warsh is highly qualified for this job, has been an outside the box thinker about the proper functionality of the institution and through his experience working with Stan, has a great understanding of the markets which I believe should be a crucial qualification of any Fed member. Whether he can maintain a high level of independent thinking will be certainly what markets will be watching for.

Conclusion

There is always a lot going on but I do want to highlight what I believe is the big picture changing shift in global trade and capital flows away from the US. We have to remind ourselves that about 75%13 of global GDP takes place outside the US and 96%14 of the world’s population lives outside the US. In other words, there is a whole world of investing and economic opportunities and we can’t take that for granted.

Something I say every letter, that regardless of what is going on out there, it remains vital that investors have adequate short-term liquidity over the next 2-3 years; knowing that period is covered can help separate the balance of one’s portfolio from the ups and downs of the market. Time horizon is always crucial and is always the best friend of any investor.

Disclaimers

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The market and economic data is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The information in this report has been prepared from data believed to be reliable, but no representation is being made as to its accuracy and completeness.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Nothing in this material should be construed as investment advice offered by Bleakley Financial Group, LLC or Peter Boockvar. This market update is for informational purposes only and is not meant to constitute a recommendation of any particular investment, security, portfolio of securities, transaction or investment strategy. No chart, graph, or other figure provided should be used to determine which securities to buy, sell or hold. No representation is made concerning the appropriateness of any particular investment, security, portfolio of securities, transaction or investment strategy. You should speak with your own financial professional before making any investment decisions.

Past performance is not indicative of future results. Neither Bleakley Financial Group, LLC nor Peter Boockvar guarantees any specific outcome or profit. These disclosures cannot and do not list every conceivable factor that may affect the results of any investment or investment strategy. Risks will arise, and an investor must be willing and able to accept those risks, including the loss of principal.

Certain statements contained herein are statements of future expectations and other forward-looking statements that are based on opinions and assumptions that involve known and unknown risks and uncertainties that would cause actual results, performance or events to differ materially from those expressed or implied in such statements. 

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. The fast price swings in commodities and currencies will result in significant volatility in an investor’s holdings. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets. The fast price swings in commodities and currencies will result in significant volatility in an investor’s holdings.

Peter Boockvar is solely an investment advisor representative and Chief Investment Officer of OnePoint BFG Wealth Partners.

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