Global shares gained in January with emerging markets outperforming developed markets, helped by dollar weakness. It was a month of heightened geopolitical risks and gold saw strong performance despite a sharp sell-off at month-end.

After the controversial kidnapping of President Maduro of Venezuela in December, Trump continued to keep up tensions. After reiterating his plans to take over Greenland, Trump announced new U.S. tariffs on NATO countries that sent troops there. This quickly backfired as the US stock markets took another hit until Trump backpedaled on that threat. He also threatened to impose 100% tariffs on Canada over that nation's trade deal with China. Mexico is facing the possibility of levies after Trump promised to impose new tariffs on countries providing oil to Cuba. Also protests in Iran caused Trump to threaten with another military strike against the regime. In other words it was just another month of empty threats and geopolitical chaos – something we sadly have gotten used to by now.

But chaos is good for the gold price which, for the first time ever exceeded $5000 per ounce, briefly reaching as high as $5626 per ounce before making a historical one-day drop of more than $600 per ounce or 11% on the last day of the month, following Trump's announcement of his nominee for the Federal Reserve Chairman, Kevin Warsh. Kevin Warsh would take over from Jerome Powell when his term ends. Jerome Powell has also been under increasing pressure by the White House to cut interest rates, revealing the Department of Justice had subpoenaed the central bank and is threatening a criminal indictment against him, threatening the FED's crucial independence. Also silver soared to a new record, only to see a one-day historical drop of a staggering 31% on the last day of the month.

Financials were the top performing sector, gaining significantly on expectations that lower interest rates could support loan growth. Industrials, consumer discretionary and materials also made gains, supported by signs of moderate economic resilience and corporate earnings. Despite strong earnings from mega-cap names, the technology sector overall was down slightly for the month amid worries about elevated valuations. The S&P500 gained 1,37%, the Dow Jones 1,73% and Nasdaq Composite 0,95%, but the dollar also dropped 0,89%, so US indices were essentially flat in Euro terms.

Eurozone shares delivered mostly a positive performance in January. Top performing sectors included information technology, energy and utilities. The weakest sectors were consumer discretionary and real estate. Within information technology, semiconductor shares led the gains amid some well-received corporate earnings, but software underperformed. The German DAX gained a modest 0,20% while the French CAC dropped 0,28%. The overall eurostoxx 50 gained 2,62%. The Slovenian SBITOP index shone once again, adding  staggering 11,2%.

The eurozone economy grew by 0,3% in Q4 2025, ahead of the market consensus. The eurozone’s unemployment rate fell to a record low of 6.2% in December. Annual inflation in the eurozone was confirmed at 1.9% for December 2025, down from 2.1% in November and below the ECB's target rate of 2%, potentially allowing for a modest interest rate cut.

Emerging market equities delivered strong gains in January with the MSCI EM index well ahead of the MSCI World, supported by a weaker US dollar, ongoing strength in AI-related technologies and the potential for rising earnings expectations. Korea was once again a standout performer, helped by policy support and strong returns from some memory-related stocks which announced strong Q4 earnings results. The Japanese Nikkei index gained 5,93% while the Yen only dropped a modest 0,33% against the Euro. The Hong Kong Hang Seng index gained 6,85% over the month.

Rudy Marchant
Fund manager Primorski skladi

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