Issue #47 - Markets Bounce, Gold Shines & Smartphones Go Satellite

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What’s in this issue;

📈 Markets & Macro — Dow breaks 50,000, tech rebounds, bond yields stabilise, gold regains momentum, and Europe closes higher.

🧠 Investor Takeaways — Why dip-buying still dominates, how tech leadership remains intact, and why gold is reasserting its hedge role.

🛰 Smartphones Go Satellite — How Direct-to-Device tech is killing off “no signal” zones and reshaping global connectivity.

🌍 Emerging Markets: The Week That Could Set the Tone for 2026 — The EM Davos summit, capital flow shifts, geopolitical pressure points, and China’s disinflationary shockwaves.

📊 Macro Pulse — US inflation, jobs, retail sales, UK GDP, and the data that could drive next week’s volatility.

💼 Earnings Radar — Key results from Coca-Cola, McDonald’s, Cisco, Shopify, AstraZeneca, and more.

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What Moved Markets This Week

Markets rebounded strongly toward the end of the week, led by a powerful recovery in U.S. technology stocks that propelled the Dow above the historic 50,000 level for the first time.

Improving risk sentiment, stabilising bond yields, and renewed buying in growth stocks helped global equities finish a volatile week in positive territory, while strength in gold supported UK and European market gains.

Key market drivers this week:

Tech rebound lifted Wall Street: Strong buying in large-cap technology stocks drove a sharp late-week rally, pushing the Dow above 50,000 and helping the Nasdaq recover earlier losses.

Bond yields stabilised: Cooling yield pressures eased valuation concerns, providing support for rate-sensitive growth and technology stocks.

Gold price recovery boosted UK and European stocks: Rising gold prices lifted mining shares, helping the FTSE 100 turn positive and supporting broader European market gains.

Europe closed higher after volatile trading: Despite macro and policy uncertainty, improving sentiment late in the week pushed major European indices into the green.

Sector divergence persisted: Software stocks lagged, highlighting selective risk-taking beneath the surface, while materials and mining outperformed.

What This Means for Investors

Momentum remains resilient: Quick rebounds from pullbacks suggest dip-buying behaviour is still dominant.

Tech leadership is intact: Large-cap tech continues to dictate market direction, reinforcing its outsized role in index performance.

Gold is reasserting its hedge role: Strength in gold reflects lingering macro uncertainty and supports diversification strategies.

Investor Playbook

Buy dips, not breakouts: Use pullbacks in quality tech and growth leaders to build exposure rather than chasing strength.

Keep gold as portfolio insurance: Maintain exposure as a hedge against volatility and policy uncertainty.

Stay selective: Focus on market leaders with strong earnings momentum rather than broad index exposure.

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Things I’m Paying Attention To

📡 Smartphones Are Becoming Satellites — Here’s Why It Matters

We’ve entered a new era where standard smartphones are gaining satellite connectivity, effectively killing off “no signal” zones. What once required bulky satellite phones and expensive plans is now being built directly into everyday devices.

What’s Changing?

The industry is shifting to Direct-to-Device (D2D) technology, turning satellites into cell towers in space. This allows regular smartphones to connect without any special hardware.

Key Players to Watch:

Apple & Globalstar: Emergency SOS via Satellite, now expanding into messaging and roadside assistance.

SpaceX (Starlink) & T-Mobile: Testing voice, data, and even video calls using unmodified phones.

AST SpaceMobile: Delivered the world’s first 5G satellite call on a standard smartphone.

Google & Android: Android 15 introduces built-in satellite messaging support.

Why This Is Huge:

Eliminates dead zones covering ~15% of Earth’s landmass.

Keeps communication online during natural disasters.

Could eventually eliminate global roaming charges.

Reality Check:

Latency, line-of-sight, and bandwidth limitations mean this won’t replace 5G — yet. Early use will focus on text, voice, and basic data, not streaming.

Bottom line: The global “dead zone” is rapidly going extinct.

Emerging Markets: The Week That Could Set the Tone for 2026

It’s a pivotal week for Emerging Markets (EM), driven by a high-profile policy summit in Saudi Arabia and a growing shift in how investors balance geopolitical risk against surprisingly strong growth fundamentals.

Here’s what matters most:

1) The “EM Davos” – AlUla Conference (Feb 8–9)

The IMF and Saudi Ministry of Finance are hosting the second AlUla Conference, a key forum shaping EM policy and capital flows.

Key themes: Resetting global trade, monetary policy under structural shifts, and rising sovereign debt risks.

What to watch: Any coordinated action on debt relief or liquidity support could be market-moving. Bilateral deals, such as the $164m infrastructure and education financing agreement signed with Uzbekistan, highlight increasing development capital flows.

2) The Great Divergence: EM vs Developed Markets

Investors are increasingly viewing EM as a growth refuge amid fiscal and political pressures in developed markets.

Earnings momentum: EM equities are forecast to deliver over 20% EPS growth in 2026, versus 15% in the US and 13% in Europe.

The trade: Cooling US dollar momentum and political scrutiny of US institutions are driving capital into EM hard-currency debt and high-growth Asian tech exporters.

3) Geopolitical “Binary Alignment”

Markets are now pricing in geopolitical pressure alongside economic fundamentals.

At-risk middle powers: Vietnam, India, and Mexico face growing pressure to align more decisively with either the US or China.

Energy volatility: Talks between oil executives and the Trump administration on Venezuela are adding uncertainty to energy-heavy EM portfolios.

4) Disinflationary Shockwaves from China

China’s export push is exporting deflation globally, easing inflation pressures across EM.

Impact: This allows EM central banks to continue gradual rate cuts, while the US and Europe struggle with sticky service-sector inflation.

What to Watch This Week

Wed–Thu: Statements from the AlUla Conference on trade barriers and debt cooperation.

Sector focus: Korea and Taiwan IT, driven by the AI capex cycle.

Risk alert: The US Dollar Index (DXY). Any surprise Fed hawkishness could disrupt EM’s current “Goldilocks” environment.

Looking Forward: What We Anticipate Next Week

This week delivers a heavy dose of US macro data, with inflation, jobs, and consumer spending all landing within a 48-hour window — a setup that could strongly influence rate expectations and market direction.

Alongside this, earnings season rolls on, with heavyweight names across tech, healthcare, and consumer sectors reporting.

🧭 Macro Pulse: What Could Move Markets

Tuesday — Consumer Health Check

🇺🇸 US Retail Sales (MoM)

Consumer spending is slowing, signalling early signs of household fatigue. A softer print strengthens the case for further Fed rate cuts and could support equities especially rate-sensitive sectors.

Wednesday — Fed Day: Jobs + Inflation

🇺🇸 US Unemployment Rate

🇺🇸 Non-Farm Payrolls

🇺🇸 Inflation Rate (YoY)

This is the key session of the week.

Rising unemployment, softer job creation, and falling inflation all point toward a cooling economy, reinforcing expectations that the Fed remains firmly on an easing path.

Markets will be watching closely — volatility risk is elevated.

Thursday — Growth & Housing Reality Check

🇬🇧 UK GDP (MoM)

🇺🇸 US Existing Home Sales

UK growth remains sluggish, keeping rate-cut expectations alive for the Bank of England. Meanwhile, US housing continues to struggle under affordability pressures, acting as a persistent drag on economic momentum.

📊 Earnings Radar: Who’s Reporting

Large-cap earnings continue across tech, healthcare, energy, and consumer sectors, offering insight into corporate resilience and demand trends:

Key themes:

👉 Consumer demand

👉 Enterprise tech spending

👉 AI infrastructure momentum

👉 Energy & commodity outlook

ICYMI

U.S. markets hit a historic milestone amid policy-driven volatility, while political tensions over government efficiency efforts, tariffs, and immigration continued to dominate headlines alongside global conflict updates.

Dow Jones Surges Past 50,000 Milestone: The Dow closed above 50,000 for the first time (at 50,115.67, up over 1,200 points on Friday), driven by a sharp rebound in financials, industrials, and value stocks after earlier tech sell-offs.

The S&P 500 and Nasdaq showed mixed results, with the latter still recovering from its worst week since November amid AI investment concerns and rotation out of growth stocks.

Tariff Tensions and Trade Negotiations: Implementation and negotiation of new/expanded tariffs (including on Canada, Mexico, China, and reciprocal measures with allies) created ongoing uncertainty. Early-week volatility eased as some pauses or talks progressed, but economists warned of supply chain disruptions and potential inflation pass-throughs.

Protests Over Federal Agency Overhauls: Demonstrations grew against Trump administration and Musk-linked efforts to slash federal spending, cut jobs (including at Social Security, USAID, and consumer bureaus), and restructure agencies. Court rulings challenged some mass firings and funding freezes, raising shutdown or operational risks.

Economic Data Releases: Key reports included inflation metrics and a delayed January jobs print, signaling a cooling labor market but resilient consumer data. Fed watchers noted implications for rate policy amid tariff-induced price pressures.

Global Conflict Updates: U.S. airstrikes targeted ISIS in Somalia (killing a key leader); Gaza ceasefire strains continued with hostage release delays; Ukraine-Russia talks showed tentative progress but no breakthrough; Sudan and other hotspots saw escalated violence.

Other Quick Hits: Severe weather events caused regional disruptions; Pope Francis stabilized after health scare; sports highlights included NFL playoffs buildup and international competitions.

Why It Relates to the Market and Investors

This week’s developments highlighted policy-driven volatility with clearer sector implications:

Market Milestone & Rotation: The Dow’s 50k breakthrough reflected investor rotation into value, cyclicals, and small-caps (outperforming growth/tech), as AI hype cooled and “higher for longer” rate expectations mixed with fiscal/tariff risks. This bifurcation favors diversified or value-tilted portfolios over concentrated tech exposure.

Tariffs & Trade Policy: Ongoing implementation and negotiations fueled short-term FX/commodity swings (e.g., gold near record levels as a hedge) and pressured import-heavy sectors (autos, consumer goods, retail). Longer-term, they risk higher inflation, squeezed margins for multinationals, and retaliatory measures—watch for earnings impacts in Q1 reports.

Government Efficiency & Fiscal Uncertainty: Protests, court challenges, and agency cuts (DOGE-related) added political risk premium, potentially delaying spending bills or creating shutdown threats. This weighs on government contractors, certain services, and overall confidence, while boosting defense or private-sector alternatives.

Economic Data & Fed Path: Cooling jobs data tempered growth fears but kept inflation vigilance high due to tariffs—supporting selective financials/banks while pressuring rate-sensitive growth stocks. Resilient U.S. economy narrative persists, aiding 2026 GDP outlooks (~2.5%+), but volatility remains elevated until policy clarity emerges.

Overall Investor Takeaway: Markets showed resilience and breadth (Dow strength vs. Nasdaq lag), but tariff/geopolitical noise keeps volatility elevated. Focus on earnings, Fed signals, and trade deal progress; hedges like gold or value plays offered protection amid the chop.

Useful Links (Any Interesting Stories)

CNBC: Dow Hits 50,000 as Markets Rebound from Tech Rout – Details on Friday’s surge and sector shifts.

Bloomberg: Tariff Negotiations and Market Reactions – Latest on trade policy impacts.

Reuters: Protests and Federal Workforce Changes – Coverage of efficiency drive backlash.

Yahoo Finance: Weekly Economic Calendar Wrap – Inflation, jobs, and Fed implications.

NYT: Global Conflict Brief – Somalia, Gaza, Ukraine – International developments.

MarketWatch: Value vs. Growth Stock Rotation – Analysis of market breadth.

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