The Market Strategist
Morning Market Brief
The Market Strategist
•January 20, 2026•0 min
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The Market Strategist•Jan 20, 2026
Why It Matters
Understanding how markets price geopolitical risk helps investors avoid reactionary moves and stay aligned with underlying economic fundamentals. As the US‑Greenland trade tensions and potential legal constraints on tariffs could reshape trade policy, grasping these dynamics is crucial for anyone navigating the 2026 investment landscape.
Key Takeaways
- •Geopolitical crises rarely halt long‑term market bull trends
- •Market reacts to data, not political headlines or tariffs
- •Supreme Court likely to block emergency‑powers tariffs on Greenland
- •Expect up to 5% pullback, testing S&P 50‑day average
- •Massive stimulus and depreciation boost earnings; Russell 2000 leads
Pulse Analysis
The host opens by reinforcing a core investing principle: long‑term bull markets are driven by fundamental discounting of future economic activity, not by geopolitical flashpoints. He stresses that investors should stay data‑focused, because markets ignore political noise and react to earnings, monetary policy, and real‑time price signals. This perspective frames the day’s analysis, reminding professional readers that short‑term headlines rarely derail the underlying uptrend that has characterized equity performance over the past year.
A looming trade dispute over Greenland dominates the political backdrop. The United States is threatening tariffs on eight EU nations, while those countries threaten $100 billion in retaliatory duties. Crucially, a pending Supreme Court decision on the Emergency Powers Act could invalidate the tariff strategy, likely curbing the escalation. The analyst predicts de‑escalation as legal hurdles emerge, but acknowledges that market participants will watch institutional positioning between 3 p.m. and 4 p.m., where any surprise ruling could trigger volatility.
Regardless of political outcomes, the episode highlights abundant fiscal and tax stimulus: retroactive refunds of $100‑$150 billion, 100 percent expense depreciation for businesses, and double‑digit earnings growth that is especially pronounced in small‑cap stocks. The Russell 2000’s outperformance underscores this trend. While a modest 5 percent pullback and a test of the S&P 500’s 50‑day moving average are possible, the analyst views these moves as a healthy pause before the broader uptrend resumes, driven by strong cash flows, capital spending incentives, and resilient corporate earnings.
Episode Description
January 20, 2026
Show Notes
Morning Market Brief
January 20, 2026
By Lawrence Fuller
Transcript
Speaker 1: Good morning, I'm Lawrence Fuller. This is your market brief for the day, and it will be an interesting one. Let me start by saying that geopolitical events and even crises typically don't end or disrupt the up‑trend, long‑term up‑trend in markets, in this case, the bull market. And I don't think this one will either.
Let me just say the market—stock market, really markets in general—are unbiased and fundamentally based discounting mechanisms of future economic activity. If you stick with that theme there, usually it keeps you on track. And I think it applies to the situation as well. We have the April of last year timeframe as a playbook for, I think, what you want to think about today.
Everyone knows the news now. The president is in Davos. There is a trade war erupting over Greenland, amongst other things. And I'm going to stay focused on the data. It appears to me that we will settle this one of a number of different ways.
First of all, I think de‑escalation is inevitable because the EU—these eight countries in particular that are being targeted with tariffs—if they don't agree to the US taking over Greenland, are fighting back with a pretty powerful force in terms of nearly $100 billion in retaliatory tariffs.
The end of the trade agreement that we had established last June, amongst other things. And so the problem there also is that we have a Supreme Court ruling coming probably within days; it could even come today, that where the Supreme Court is very likely to rule against the use of tariffs under the Emergency Powers Act.
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