Modest returns in January
Global equities rose 1.6% in January. The reason is that investors moved their money out of American and technology stocks and instead invested in Emerging Markets, smaller companies, and sectors such as energy, raw materials, and industry.
Danish equities delivered solid returns for the third consecutive month but have fallen somewhat again at the beginning of February due to renewed uncertainty in the global equity markets.
All bonds also posted small gains in January. Meanwhile, the dollar weakened somewhat, while the oil price increased. Prices of several gemstones and industrial metals continued to rise significantly, but in recent weeks there have been sharp price declines.
Why? Strong earnings figures, geopolitical calm, and declining inflation
The first earnings reports from the US, Asia, and Europe for the fourth quarter of 2025 showed better results than expected, and the outlook for 2026 is also somewhat better than anticipated.
In addition, Trump carried out another so-called TACO (Trump Always Chickens Out). This means that he threatened various measures in connection with Greenland, Denmark, and trade with the EU—only to later withdraw the threats. This has created greater geopolitical stability. However, Trump’s many attacks on US allies are increasingly causing international investors to turn their backs on the US and American equities.
Inflation in the EU and the US continued to decline around the turn of the year, which is positive for both bond and equity markets.
More market unrest at the beginning of February – turbulence in the tech sector
The very strong performance in financial markets at the end of January has become more uncertain at the beginning of February.
Metal prices have fallen significantly—especially silver and gold—as have cryptocurrencies and many stocks, particularly technology shares.
There are three reasons for this:
Unrest in the tech sector: Investors have become uneasy because tech giants are making significantly larger investments in artificial intelligence than expected. This is also reflected in the latest earnings reports. There are also concerns that AI solutions could in the future undermine the revenues of software companies.
Doubts about the US economy: Weak labor market figures this week have raised doubts about the strength of the US economy and thus about companies’ earnings prospects for the rest of 2026.
Very optimistic investors: Investors have been extremely optimistic, and many have taken on more risk than usual. These investors have been forced to close some positions and sell, which has led to further price declines.
No one knows how long the market turbulence will continue or how severe a potential downturn could become. The downturn may also already ease in the coming weeks.
In the coming weeks, investors will focus in particular on the latest growth and inflation data from the US, additional earnings reports and announcements from the tech sector—and whether Trump manages to restrain himself and avoid creating new international political unrest, for example in connection with Iran.