Macroeconomics: Data Improving
- Mixed to slightly positive data in the US. Inflation confirmed at 2.8%, labor market unchanged, GDP solid
- Solid manufacturing data in the EU, particularly thanks to GER, service sentiment weaker than expected but still above 50
- China real estate still an issue but industrial production solid
Microeconomics: Q4 ‘25 Started Strong
- 13% (65) of S&P 500 companies reported, 75% positive EPS surprise (78% past 5 years) and 69% positive revenue surprise
- Q4 2025 YoY EPS growth of 8.2% (10th consecutive positive Q)
- For Q1 2026, 6/10 negative EPS guidance, 4/10 positive EPS guidance
- Earnings surprises (+5.3%) are below 5-year averages (+7.7%)
- 7/11 sectors are reporting YoY growth (IT, Materials) while 4/11 are reporting YoY declines (Energy, Health Care, Cons Discr)
- Big names report this week: IT (MSFT, Meta, Tesla, Lam Research, IBM, AAPL, ASML, SAP, STM), Financials (Visa, Mastercard, AmEx), Energy (Exxon, Chevron) plus others
Theme 1: Greenland
During his speech in Davos, President D. J. Trump stated that he does not intend to use force to gain control of Greenland. During the same day, he confirmed that he has formed a framework of a future deal with respect to Greenland and the entire Arctic Region, based on which tariffs won’t be imposed onto Europe
In our opinion, the U.S. administration has 3 objectives in mind, with regards to Greenland:
- Access to natural resources
- Additional military presence
- Access to Greenland’s Exclusive Economic Zone (EEZ)
Market implications: Positive reaction in the short term. Potential further volatility in the medium term during the negotiations of details on the framework but no major shake-up, unless Europe’s response (tip-for-tap) leads to escalation
A word of caution: It ain’t over yet. Further negotiations, threats, grunts, and happy smiles should be expected. That said, at least for now, some degree of relief seems warranted.
Our Asset Class View
Disclaimer
The information, products, data, services and instruments contained or described in this publication are for information purposes only and constitute neither an advertisement or recommendation nor an offer or solicitation to buy or sell any product.
The financial products described in this publication are not suitable for all investors. The information contained in this publication does not represent any financial, legal, tax and/or other recommendations. Any investment or other decision should not be made solely on the basis of this document. Before making any investment decision, it is recommended that you seek a thorough examination of your situation and the advice of a qualified specialist.
Although the information contained in this document has been compiled by PKB on the basis of or with reference to sources, materials and systems believed to be reliable and accurate, PKB does not guarantee its currency, accuracy or completeness.
PKB accepts no liability, to the fullest extent permitted by applicable laws and/or regulations, for loss or damage of any kind arising directly or indirectly from the content, accuracy, completeness or otherwise of the content or any third party content referred to in this publication.
The analyses and forecasts contained in this publication are based on assumptions, estimates and hypothetical models which may prove to be incorrect and therefore lead to substantially different results.