Welcome to our first market update of 2026.
Strap yourselves in, there is a lot going on!
There I was, thinking not a great deal happened over the holiday period, certainly nothing of a serious note, globally. Then, at the weekend, Trump and his regime kidnapped a Head of State and placed him on trial two days later. He’s probably guilty of drug trafficking and selling weapons, but so is the US – guilty of selling arms to most countries across South America! The real deal is about oil, and on the back of the arrest, oil companies in the US saw their share prices rocket, and the oil price fell.
In terms of world oil production, Venezuela produces less than 1% of the supply, with exports also constrained by US sanctions and a naval blockade. The rub, however, is that the country holds approximately 17% of the world’s proven crude reserves.
Markets in general were unmoved, but reports are circulating that Cuba, Columbia and Greenland could be next. Understandably, this would unfold into greater concerns. No wonder defence stocks surged.
One of Trump’s aides, Stephen Miller, added to tensions when he asserted in a CNN interview that the US has a right to take Greenland, in a world “governed by strength”. Not quite sure how this attitude sits when it comes to mediating between Russia, Ukraine and Europe in the quest for peace!
However, when all is said and done, rarely do geopolitical events swing or derail markets, which are more influenced by macro-economic data and company earnings. On saying this, traders pounced on the opportunity by buying up Venezuelan bonds. Just weeks before the arrest, analysts at Citigroup predicted gains of as much as 60% on the nation’s bonds if the President were replaced.
Today, we will take a broader look at what may unfold in 2026. Predicting is folly, but understanding some of the underlying market drivers is useful.
Finally, we will look at the short-term progress of selected assets following our recent switches and compare this with the performance of our US technology holdings.
One trend which is not good for selected companies is the decline in alcohol consumption, particularly by the younger generation.
In this week’s content:
- Oil and Venezuela
- Greenland
- Some of the themes on the radar for 2026
- Blue Sky switches
- Drink driving may be a thing of the past
- In conclusion
Oil and Venezuela
Trump has been quoted as saying Venezuela would send as much as 50 million barrels of oil to the US, with the proceeds “to benefit the people of Venezuela and the US”. The Trump administration also told Venezuela’s interim leader that her government must exclusively partner with the US on crude production and favour the US when selling heavy crude (Source: Bloomberg).
Just as the ousted Venezuelan leader, Nicolás Maduro, pleaded not guilty this week to US charges of narco-terrorism, bondholders made a one-day gain of some $4 billion. The hope is that a restructuring would unlock more profit. Good news for private capital firms and energy investors, as Trump pledged that the US would spend billions to fix Venezuela’s failing oil infrastructure.
This looks like a turning point for investors as Maduro’s arrest is likely to unlock capital in a country which was previously deemed too risky.
Continues…
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Risk warning
Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.