Unheilvoll

With everything that is going on in the world, it’s easy to forget that we are in the middle of earnings season. So far, the aggregate picture is positive with the S&P 500 on track for 8.2% year-over-year earnings growth for Q4 2025, marking what would be the tenth consecutive quarter of profit expansion if realised.

Of course, all eyes will be on the Magnificent Seven, with Microsoft, Meta, Apple and Tesla reporting this week. Investors seem to have already made up their minds where the chips may fall, as value stocks have been outperforming growth by almost 4% year to date. That’s a good thing, as rotation is far preferable to money leaving the stock market altogether.

There is also the question of where capital might flow if earnings were to disappoint. Bond markets have their own problems. It’s not just concerns around the independence of the Federal Reserve, but heavy government spending has put the long end of the curve under severe pressure, also in Europe, and especially in Japan.

Gold and silver continue to attract worried investors, and with good reason. The scale and speed at which events of historical consequence are being disseminated are unprecedented. And yet, here we are, global equity markets are still within a whisker of their all-time highs. What could possibly go wrong?