It’s been a long, holiday-shortened week of trading with the first, short-lived, gut check of 2026. Over the weekend President Trump broke out the trade war playbook again souring the mood in Davos ahead of the World Economic Forum. On a lighter note there was plenty of entertaining playoff football. That was capped off on Monday night with the Indiana Hoosiers winning their first National Championship.

Throughout this week the rotation/broadening action we've seen remained intact until today’s session, breaking a streak of 15 consecutive sessions where the Russell 2k outperformed the S&P 500. According to Bloomberg this was the longest streak since 1996. For the week major indices closed slightly lower.

Sector level performance this week was mixed. Energy and materials sectors were both up >2% the best performing sectors this week and year as the commodity complex continues to move higher. On the downside, yield oriented sectors REITS and Utilities both fell >2%. Financials fell 2.5% this week and is now down 3.5% YTD. Large cap banks, credit card companies, payment processors and private equity firms have led to the downside. Insurance and regional banks outperformed though the latter sold off >3% today to end the week slightly lower.

Info tech ended modestly lower this week with quite a bit of dispersion beneath the surface. Software has been a big underperformer this year but snapped back today as there have been multiple analysts and respected investors suggesting that the AI displacement story is overdone. Commodities continued to surge, led by natural gas ahead of the weekend storm while metals also continued to rip higher.

Geopolitics and central banks will be in focus again next week, headlined by the Fed's rate decision, but earnings season will start to garner more attention with the pace and scope of announcements picking up- including megacap tech. We may also get a new Fed chair nominee, finally. Have a great weekend and stay safe.