20.02.26 - US Macro: surprising data set
Today’s US macro data delivered a mix of numbers: growth is cooling faster than expected, while inflation pressures are re-accelerating.
US GDP growth slowed to an annualized 1.4% in Q4 2025 (vs. 3.0% expected, 4.4% in Q3). At the same time, the Fed’s preferred inflation gauge, PCE prices, rose +0.4% m/m in December (+2.9% YoY), the strongest monthly increase since February and above expectations.
Markets:
Equities: US futures under pressure after the data
Bonds: Yields ticking higher (US 10y ~4.08%)
Currencies: USD softer
Commodities: Precious metals strong - silver up 5% > USD 81/oz and gold more than 1% >USD 5’050/oz
Cryptos: sideways; Bitcoin around USD 67k
Volatility: VIX continues to trend higher
My View: Only a few weeks ago, markets were priced for “perfection”. It seems they now definitely need to reassess the “perfection pricing”.
Valuations in parts of the equity market remain stretched, while macro reality is turning less supportive: growth is slowing and inflation is proving sticky. This combination complicates the outlook for monetary policy and risk assets alike. This reduces the probability of near-term Fed easing – and with that, one of the key pillars that supported high risk appetite.
Importantly, overall equity indices are still not far from record highs. The recent damage has been concentrated in selected, crowded names. A broader re-rating of valuations therefore looks increasingly likely as investors reassess earnings assumptions and discount rates under a “higher-for-longer” inflation backdrop.
I currently see no clear macro or liquidity catalyst that would justify a sustained push to new highs in equities. Positioning remains fragile: many investors who suffered losses in recent swings, and fund managers who were positioned “all-in,” are now constrained by lower cash buffers and reduced risk appetite. This limits the fuel for an aggressive rebound.
Bottom line:
The environment remains headline-driven and volatile. Markets can overshoot in both directions, but for now, patience remains key. Selective opportunities may emerge in individual stocks if valuations reset to more attractive levels – but the broader backdrop argues for caution rather than chasing rebounds.
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