The views expressed are Ed le Feuvre's personal market observations and do not constitute investment advice, a financial promotion or a recommendation to buy or sell any security. Read the full disclaimer.
Dear Quay Financials,
Happy New Year, and I hope you all enjoyed a well-earned celebration.
Sunday evening in Gibraltar, and the Rock is wearing its winter rain like a reality check. I landed early this morning from Gothenburg, trading classic Scandinavian snow for a Mediterranean storm that rattles shutters and strips the harbour of illusion. The sea is restless, ferries are delayed, and the usual Sunday calm feels suspended but not broken, just waiting.
Week 1 of a new year always carries this tension. Markets want a clean slate; reality, ironically, rarely obliges. Screens flicker green and red with equal confidence, but conviction is thin, volume thinner still, and desks are barely staffed and barely engaged. This is not where trends are born, no, it’s where mistakes are quietly seeded.
And so, before the year accelerates and narratives harden, let’s look at what moved this week, and what the next may have in store.
Let’s turn to the week.
Recap: Where We Left Off (Week 52)
Week 52 closed the year with markets priced for relief but positioned for fragility. Liquidity thinned, volatility compressed, and year-end mark-ups did much of the heavy lifting. Equities hovered near highs, credit behaved politely, and gold refused to relinquish its role as policy-error insurance.
We ended 2025 with three unresolved tensions: markets pricing rate cuts before proof that they will happen; equities levitating while bonds withheld endorsement of such levity; and confidence concentrated in a few hands and fewer names.
2025, then, was not a euphoric close, but it was a hopeful one. What did not materialise over the holiday week was a decisive challenge to those assumptions. What surprised was how little genuine information the shortened market week offered.
This Week: Thin Air, Quiet Markets, and the Stillness Before Reopening; When the Real Work of the Year Has Yet to Begin
Weekly Market Table
| Asset | Close | Weekly move | Prior week move | YTD | Notes |
|---|---|---|---|---|---|
| S&P 500 | 6,929.94 | +1.4% | +0.5% | +1.4% | Quiet tape; solid start to the year |
| Nasdaq Composite | 23,593.10 | +1.2% | +1.2% | +1.2% | AI bid held up |
| Russell 2000 | 2,534.35 | +0.2% | -0.4% | +0.2% | Small caps lagged |
| FTSE 100* | 9,870.68 | -0.3% | +1.1% | -0.3% | Closed 25–26 Dec |
| STOXX 600* | 588.61 | +0.5% | +1.1% | +0.5% | Record-adjacent |
| Nikkei 225 | 50,704 | +0.6% | -0.6% | +0.6% | Japan open on 26th |
| Hang Seng* | 25,818.93 | +1.9% | +0.2% | +1.9% | Closed 25–26 Dec |
| Gold (COMEX, Dec) | $4,529.10 | +0.4% | +1.0% | +0.4% | New highs |
| WTI (front month) | $58.35 | +2.7% | +3.2% | +2.7% | Rebound attempt |
| Bitcoin (CME, Dec) | $86,923.48 | -8.8% | -4.6% | -8.8% | Volatility back |
| US 10Y Treasury | 4.13% | -2 bps | -1 bps | -2 bps | Curve mildly steeper |
| US 2Y Treasury | 3.48% | -4 bps | -2 bps | -4 bps | Cuts still priced |
| DXY (US$ index) | 97.89 | -0.7% | +0.4% | -0.7% | Dollar softened |
* For markets closed on Friday 2 January, the close shown is the latest available (typically Wednesday 24 December).
US & Global Equities
- United States: U.S. equities finished the week modestly higher, but activity was subdued and largely confined to familiar large-cap leadership. There were no major data releases, policy announcements, or earnings updates to materially alter the outlook. No fresh convictions this week.
- Small caps: The Russell 2000 lagged again. In a week with minimal volume and no new macro inputs, that reinforced an existing pattern rather than creating a new signal.
- Europe: Closed more than open, limiting meaningful interpretation. Where open, indices were broadly stable, supported by defensives and yield-oriented sectors. There were no policy announcements or data surprises.
- Japan: A quiet reopening late in the week produced a modest gain, but trading volumes were thin and news flow limited. A positioning week, not an informational one.
Gold, Digital Assets and Other Assets
- Gold: Consolidation, not discovery. Gold remained near recent highs. There were no macro or policy developments during the week to explain the move; price action appeared consistent with consolidation rather than a response to new information.
- Bitcoin: Volatility without a catalyst. Bitcoin fell sharply, but in the absence of regulatory news, institutional flows or macro triggers, the move appeared to reflect thin liquidity and market positioning rather than a change in the underlying narrative.
- Oil: WTI attempted a rebound, but with many participants absent, the price action offered limited insight.
Macro & Policy
- Policy: Government activity remained muted, with the US shutdown deferred on temporary funding. Markets operated largely without fresh policy input.
- Rates: Treasury yields drifted rather than signalled. In the absence of new data or central-bank guidance, the moves looked technical rather than a meaningful macro repricing.
- Dollar: The DXY softened 0.7%, but in a holiday-thinned week this was insufficient to establish a new currency trend.
Geopolitical Analysis
- No significant geopolitical development altered market pricing during the week. Energy markets carried little evidence of a new risk premium, consistent with ample supply and a lack of fresh catalysts.
What's Pertinent This Week (Week 1)?
- Thin liquidity reduced the value of the tape. With desks only partially staffed and several markets closed, modest index moves carried little information for capital allocation. The useful signal was the absence of confirmation, not the direction of a holiday session.
- Breadth still lagged the headline indices. The Russell 2000 rose only 0.2% against 1.4% for the S&P 500. For allocators, that left the familiar concentration question unresolved: large-cap leadership continued without a broad domestic confirmation.
- Gold and Bitcoin behaved very differently. Gold gained 0.4% while Bitcoin fell 8.8%. The divergence mattered because it reinforced that defensive assets and liquidity-sensitive digital assets should not be treated as a single “alternative” allocation when market depth is poor.
What Will Week 2 Bring?
Wednesday 7 January: US ISM Services
The key release in Week 2 is US ISM Services. Given the sector’s importance to employment and domestic demand, the useful question is whether growth is cooling without stalling. The report matters because it is one of the first pieces of data capable of challenging the assumptions carried through the holiday period.
Other catalysts:
Secondary labour indicators, including job openings and survey-based employment measures, will begin to restore the information set. Inflation data is a story for later in the month, but expectations will start adjusting ahead of it. With the calendar still relatively light, credit spreads and the Treasury curve may offer cleaner signals than small moves in equity indices.
Strategic positioning:
Optionality remains more valuable than urgency. Holiday distortions deserve a higher evidential threshold, and any shift in risk posture is better anchored to the return of liquidity, breadth and confirmation from bonds and credit than to a few thin sessions at the start of January.
Ed's Closing Bell
This week felt a little like that familiar Christmas line “not a creature was stirring, not even a mouse;” Markets were open, prices moved, but almost nothing truly spoke. With governments largely closed, desks thinly staffed, and data scarce, the noise was minimal and the message even more so.
That quiet should not be mistaken for comfort. Early January calm is often the absence of participation, not the presence of conviction. As liquidity returns and the calendar fills, markets will be forced to move from assumption to evidence.
For now, Week 1 did what it was meant to do: it reminded us that patience is still a position and that the real work of the year has yet to begin.
Final Words
Perhaps we sit back and enjoy the season with mince pies, mulled wine and stollen included. If the markets are taking a break, then maybe we should too.
As ever, these are my personal market observations and reflections. Please conduct your own research and seek appropriate professional advice before making investment decisions.
From Gibraltar
The only fireworks breaking the stillness were those in the sky; markets, for now, remained grounded.
Further Reading
Full Disclaimer
The views expressed in this blog are my own personal market observations and reflections. They do not constitute investment advice, a financial promotion, or a recommendation to buy or sell any security. This publication is not made in my capacity as a director of Quay Financials (Gibraltar) Limited, which is authorised and regulated by the Gibraltar Financial Services Commission. You should always conduct your own research and seek independent advice appropriate to your circumstances before making any investment decision.
Information has been obtained from sources believed to be reliable, but no representation or warranty is given as to its accuracy, completeness or timeliness. Market levels and weekly changes are compiled from public market data available at 4 January 2026 and may vary by venue, instrument and closing convention. The value of investments and the income derived from them may fall as well as rise, and investors may not recover the amount originally invested. Past performance is not a reliable indicator of future results. Readers should conduct their own research and obtain independent professional advice appropriate to their circumstances before making an investment decision.
