January 12, 2026 | Finliti | Free Subscriber 😃

Military Markets 🪖Markets juggled rising oil, a defense-spending buzz, and tech pauses—setting the tone for an eventful start to 2026.

Highlights From Last Week:

• ⚡️ Energy and banks popped early; homebuilders and tech cooled mid-week.
• 🪖 Defense names jumped on talk of bigger military budgets.​
• 👀 All eyes shift to jobs data and the next rate signal.

US Markets: Tanks, Chips, and a Tug-of-War

U.S. stocks started the week strong, with the Dow and S&P 500 hitting new highs thanks to rising oil prices and gains in energy and banking shares. Tech giants kept the Nasdaq afloat early, but momentum slowed mid‑week as homebuilders dipped and crude oil cooled. Defense stocks later rallied sharply after President Trump proposed a significant increase in U.S. military spending, lifting industrials and offsetting tech softness. Overall, the market traded mixed but resilient, with investors now focused on upcoming job reports and economic signals to gauge the path for interest rates.

What does it mean for you?

This week’s U.S. market showed mixed momentum, with early strength in cyclical sectors offset by midweek struggles. Policy moves and geopolitical events drove sharp swings in certain industries, highlighting how external factors can influence market leadership. Economic data and interest rate signals remain key for guiding near-term sentiment.

TSX: Maple Metals vs. Barrel Blues

Canada’s TSX kicked off the year with record highs and some big swings as basic materials and mining stocks helped lift the index early, even while energy shares slid after geopolitical tension around Venezuela hit sentiment for Canadian oil names. Strength in materials and precious metals buoyed the market, though mid‑week weakness in industrials and mining weighed on returns. The market rebounded sharply Thursday, driven by gains in energy stocks. Overall, a mix of sector rotation, geopolitical noise and volatility expectations made for an energetic start to 2026 on Bay Street.

What does this mean for you?

This week’s Canadian market underscored how sector rotation and global events influence performance, with swings in materials, energy, and industrials driving overall movement. Early-year gains highlight market responsiveness to macro and geopolitical developments, while volatility expectations for 2026 suggest that underlying trends may shift quickly, even amid record highs.

Crypto: Balancing on the $90K Railing

Bitcoin bounced back to above US $90,000 on Thursday after dipping below that mark mid-week following a small pullback from Monday’s near US $95,000 peak. Traders seemingly took profits as trading volumes were light, while expectations for a near-term Fed rate cut have dropped. Bitcoin found support near its 50-day moving average of about US $89,000. Meanwhile, derivatives data showed a lot of traders are using leverage, meaning many are betting on price rises with borrowed money. When traders are speculating for a rebound and using leverage, this can leave them vulnerable to price corrections because even a slight move in a non-active market can lead to big market swings in either direction. This makes the market more sensitive because if prices fall, some traders could be forced to sell, adding extra pressure.

What does this mean for you?

Bitcoin investors may see short-term volatility, as leveraged traders and profit-taking can cause quick price swings in a light volume market. Eyes are on the 50-day moving average from a technical standpoint of around $89,200. This is a key technical support indicator that traders are watching to determine the next course of action. With lower expectations for a Fed rate cut, market swings may continue, so caution is advised.

Emerging Markets: Nerves Before the Numbers

Emerging-market assets dipped recently as investors grew cautious amid geopolitical tensions and ahead of a key U.S. jobs report. The MSCI emerging-market equity index fell 0.8%, while currencies like the Thai Baht, South Korean Won, and South African Rand softened. Traders pulled back from riskier positions, but bond markets stayed strong, with countries such as Poland, Hungary, and Turkey taking advantage of attractive borrowing costs. A firm U.S. dollar and uncertainty around interest rates added pressure, keeping equities and currencies volatile.

What does this mean for you?

Emerging-market investors should brace for short-term volatility in equities and currencies amid geopolitical tensions and uncertainty around U.S. interest rates. Strong bond demand highlights opportunities for fixed-income investors. While near-term swings are likely, emerging markets still offer long-term growth potential for patient investors.

Commodity Craze: Venezuela Shock, Oil Sands Jolt

Shares in Canada’s top oilsands producers fell Monday after the U.S. captured Venezuela’s leader and President Trump signaled American companies could take over its oil industry. Cenovus (CVE), Canadian Natural Resources (CNQ), Suncor (SU), Enbridge (ENB), and South Bow (SOBO) all dropped between 1–5%, pulling the TSX energy subindex down more than 3%. Analysts say Venezuelan crude could compete with Canadian heavy oil in the U.S., but any price impact is expected to be modest. With Venezuela’s production far below its peak and years needed to rebuild, Canada’s pipelines and potential exports to Asia are helping to keep its oil industry resilient despite short-term market jitters.

What does this mean for you?

Investors should be aware of potential geopolitical risks from U.S. actions in Venezuela, which could add uncertainty to energy markets. While any direct impact on Canadian oil prices is likely small, the situation highlights the importance of monitoring global supply shifts and considering portfolio diversification to manage exposure to energy sector volatility.

Meme Stock Stalkers: Beyond the Burger Bounce

Shares of Beyond Meat (BYND) surged this week as a meme-stock rally returned, fueled by social media chatter and calls for a short squeeze. The stock jumped 11% on Wednesday and gained earlier in the week, ending Thursday up 17% for the week. The rally was sparked when a trader announced buying 1.5 million shares, prompting others to jump in. While the price action echoes past meme-fueled spikes, the company’s fundamentals remain weak. Volatility is expected to continue, making it a risky play.

What does this mean for you?

Beyond Meat’s recent gains are fueled by social media hype and short-squeeze speculation rather than its underlying business, which is still struggling with declining revenue and losses. Investors should expect high volatility, with prices swinging sharply in either direction.

Moderate and Mellow Markets: Defense Contractors Take Flight

Global defense stocks rallied after U.S. President Donald Trump called for a US $1.5 trillion defense budget in 2027, up from about US $1 trillion, saying it would build a “Dream Military” to keep the country safe. Major U.S. defense contractors like Northrop Grumman (NOP), Lockheed Martin (LMT), RTX (RTX), and Kratos Defense (KTOS) saw strong gains, while European aerospace and defense shares also climbed. Some Asian defense names ticked higher too. The surge reflects investor optimism about increased military spending amid heightened geopolitical tensions, including recent U.S. actions in Venezuela and broader strategic rhetoric.

What does this mean for you?

Trump’s call for an increased defense budget boosted stocks in related sectors across the globe. Investors may benefit from higher defense revenues, but geopolitical tensions and U.S. actions abroad add volatility. Overall, defense stocks may look attractive, yet diversification remains important to manage risk.

ESG: Exit Signs on the Climate Stage

U.S. President Donald Trump announced the U.S. will step away from dozens of international climate and sustainability groups, including the UN Framework Convention on Climate Change (UNFCCC), arguing they no longer align with national priorities. The decision follows a 2025 review of U.S. involvement in global organizations and would make the U.S. the first country to exit the UNFCCC, which supports major agreements like Kyoto and Paris. Supporters say the move sharpens the focus on domestic interests, while critics caution it may leave the U.S. on the sidelines as other countries continue to invest in clean energy and global climate efforts.

What does this mean for you?

The U.S. stepping back from global climate agreements creates uncertainty for clean-energy and ESG investments, as government support continues to waver. While traditional energy sectors could see short-term gains, U.S. companies risk falling behind global peers in the growing green economy. Overall, investors face more policy and market volatility.

Jargon Word of the Week

Pyramid risk refers to the danger that comes from over-concentrating investments in a single asset or strategy while layering additional positions on top, similar to building a pyramid. If the base fails, the whole structure collapses, magnifying losses.

In a sentence, please!

“Even though each trade looked solid on its own, the fund’s heavy exposure to tech stocks created significant pyramid risk—if the sector stumbled, losses could cascade quickly.”