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New Year, New Earnings Season

Market Update

12.01.2026

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What happened last week?

US

  • US military action in Venezuela knocked energy stocks around
  • Discord filed for an IPO

Europe

  • Eurozone inflation unexpectedly fell to the ECB’s 2% target

Asia

  • Trade tensions flared up between China and Japan, sending rare-earth stocks

Why It Matters

Chat platform Discord just filed for a US IPO – taking the first steps toward a listing that’s been whispered about for years. Details are still minimal: there’s no valuation, timing, or financials yet. But the signal’s loud and clear: venture-backed tech is testing the IPO waters again. Discord’s numbers could determine whether others take the plunge.

Energy stocks saw a short-lived boost last week, lifted by the prospect that US action against Venezuela’s president could reopen that country’s huge oil reserves to Western companies, a long-term positive for majors and refiners. But those gains faded as investors realised any production increase would take years to pull off. Oil prices gained slightly as US tensions kicked up a notch – not only with Venezuela, but with Iran and Russia, too.

Eurozone inflation unexpectedly fell to just 2% in December, neatly in line with the European Central Bank’s stable-price target. That was down from November’s 2.1% pace. The mild cooling in consumer prices was a bit of validation for the central bank, in its slow-but-steady campaign to bring down interest rates – just enough to support the economy, without igniting a new inflation flare-up.

China’s latest move to tighten its grip on exports to Japan lit a fire under rare-earth and magnet stocks. But the market didn’t blink much beyond that. Ultimately, the measures looked targeted, not sweeping, and most supply chains now have some built-in flexibility.

The Focus This Week: New Year, New Earnings Season

Earnings season will kick off this week as it always does, with the big US banks. Expectations are vaulted for JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley, with investors expecting strong numbers across trading activity, dealmaking, and profits. But they’re not here to relive the end of last year; they’re listening for clues about what kind of year 2026 might be and looking for these banks to set the tone.

Things seem hopeful. The US economy is holding up, the job market’s doing better than feared, and inflation has even cooled somewhat. This earnings season’s already unusual: analysts were raising their forecasts at the end of last year, instead of cutting them as they usually do. That hints at some underlying strength. That said, the data’s still uneven, and market confidence is fragile. So, it’s a good time to find out what’s been happening with the country’s banks. After all, they sit at the centre of the economy – and what they say about loan demand, deposits, and credit quality tends to cut through the noise faster than any monthly data.

Stocks are priced for a good year ahead, with growth and margins expected to remain fat and happy. Valuations reflect that optimism. When stock prices are high, though, “good” results aren’t enough. Investors want confirmation that earnings strength can spread beyond the usual mega-cap tech into financials and other sectors, supporting the idea of a broader, market-wide rally.

This is where banks tie everything together. With one hand, they’re financing data centres, underwriting debt, and advising on the deals that turn AI hype into actual spending; with the other, they’re handling consumer credit and deposits, loan demand, and commercial real estate. That gives them a clear read on both AI and the real economy. If bank executives sound confident on both fronts, that would suggest that broader earnings momentum might continue all year. But if their tone turns cautious, it’s worth remembering that even the strongest tech wave still depends on the health of the real economy.

The Week Ahead

  • Monday: A soft launch to the week. Coffee first, opinions later.
  • Tuesday: US inflation (December). Earnings: JPMorgan, Delta Air Lines.
  • Wednesday: China balance of trade (December), US PPI (October and November), US retail sales (November), US home sales (December). Earnings: Citigroup, Wells Fargo.
  • Thursday: UK economic growth (November), US retail sales (December). Earnings: BlackRock, Goldman Sachs, Morgan Stanley, TSMC.
  • Friday: Low on data, high on perspective.

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