It's 2026 and stocks rise, Gold hits $4,391, Oil up, crypto's up, bonds steady

• Markets begin 2026 on a positive note. Stocks are up around the world.
• Gold is up, oil is up, crypto is up, bonds are steady.
• Key themes in 2026 – Mid-terms, FED, Rates, Macro Data, and Tech IPO’s.
• Try the Shepherds Pie.

Good morning and Happy New Year. Welcome to 2026!

2025 turned out to be a pretty good year for investors. Even though the major averages slipped a bit into the closing bell on the final day, the year ended higher across the board — it was the third consecutive year of gains for the S&P, Nasdaq, and Dow.

Now the next question - What’s in store for 2026? There’s a lot to digest, so let’s talk themes that we will explore as the year goes.

Midterm elections mean headline risk. History suggests midterm years can bring more chop and sharper pullbacks, even if the longer-term trend can remain constructive.

It could be a potentially landmark year for Tech IPOs - with names like SpaceX, OpenAI, Anthropic and Kraken being discussed as 2026 candidates (as usual timing will depend on markets and regulators). We are talking ‘trillions’ in money raised.

AI moves from “promise” to “payoff.” Investors will start demanding proof – Who is monetizing and who is just spending?

A new Fed Chair is a certainty – while policy remains an uncertainty. JJ’s term ends May 2026, and the succession plan will be a real market variable — and that will shape the conversations around rates, inflation, growth, and policy.

Valuation is no longer “cheap.” – The S&P is trading around ~22 x’s forward earnings, above longer-term averages — which means fundamentals matter more and “multiple expansion” gets harder. Will we see investors favor a broadening out?

Energy, precious metals, and alternatives. Will we see investors continue to lean into real assets and diversifiers?

And of course – there is always geo-political risk.

Bonds - We start the year with the 10-year Treasury at 4.15%, the 30-year at 4.84%, and mortgage rates around 6.18% for borrowers with a 720+ FICO. Fed Funds sit at 3.50%–3.75%.

Some analysts are calling for rates to fall into the high-2% range — I don’t see it.

Think about the impact of the big, beautiful bill, tax cuts, tax refunds hitting the system, and an economy that continues to grow. Real GDP is likely running somewhere between 2.5% and 3.0%, while nominal GDP is expected to be north of 5%. That’s not an environment that demands aggressive rate cuts – in my opinion and it’s certainly not one that supports a return to ultra-easy money. Anything below 3.5% would be considered entering the ‘ultra-easy zone’.

Oil. Crude begins the year at $57.43, still locked in the trading range we’ve been discussing — roughly $55 to $58.60. Remember - we are working through a known glut – this is not a surprise to the market.

In response, OPEC+ has chosen to stay put — neither increasing nor cutting production — out of concern that adding barrels would allow the glut to grow rather than shrink. So, for now, that keeps crude range-bound, with prices being driven more by inventory normalization – not by geopolitics or demand shocks (for now!).

Gold? Well that began the year at $4,320 and is up $72 this morning at $4,391 – like oil – we remain in a trading range that we have been discussing – trendline support at $4,180 with resistance at the highs of $4,550.

Recall what I said on Wednesday after pointing out gold’s amazing move in 2025 (up 66%) - The message is loud and clear. Confidence in paper money is eroding. The market does not believe inflation has been fully defeated. Precious metals are telling you inflation is sticky, structural, and policy driven. The Fed can pause, cut, or talk tough — but the market is saying the real cost of money is still rising.

And if that is the case – we can expect gold to continue to push higher. Trendline resistance drawn from the April high $3,500 to the October high $4,375 – suggests that we could see gold test into the 4800’s…. over time…up about 9% from here.

Crypto risk assets/networks will continue to be a focus. Bitcoin is trading at $89,300 this morning, Ethereum is at 3,050 and Solana is trading at $128.

Money tools like Stable Coins will be another ‘theme’ this year. They are expected to become the ‘digital dollar’. The regulatory framework is now in place – thanks to the Genius Act - and is expected to be a major catalyst in 2026. So, get ready to hear more.

US futures are higher as we welcome in the New Year. Dow futures +180, the S&P + 40, the Nasdaq is up 260, and the Russell is up 18 as there appears to be a fresh burst of enthusiasm. But it is Friday of a shortened holiday week, and I do not expect volumes to reflect broad participation. Remember – most of the action will be driven by algo’s and moves can be amplified as a result.

Next week brings the start of a regular calendar of eco data – but remember – we are facing the potential of another gov’t shutdown at month end – if the clowns in DC continue to fail to do their jobs.

European markets are beginning the year higher as well. Italy and the Euro Stoxx fighting for the lead – both up 0.55%, the UK is up 0.5%, Spain is up 0.4%, France up 0.3% while Germany is up 0.2%.

The S&P 500 closed the year — and begins the new year — at 6,845. Wall Street estimates for year-end 2026 range from 7,100 to 8,100, which implies a potential gain of approximately 3.7% on the low end to 18.3% on the high end.

That’s a wide dispersion, reflecting very different assumptions around earnings growth, valuation multiples, rates, FED, inflation and other macro conditions never mind the mid-term elections. It is a reminder that 2026 is about sticking to the plan and riding the waves.

Warren Buffett is now officially retired, having handed the reins to Greg Abel. Now, Berkshire Hathaway is sitting on roughly $380 billion in cash. At today’s rates, simply parking that cash in short-term Treasuries would generate about $13.7 billion a year in interest — and that’s before doing anything else. But let’s be clear: that is NOT the plan. Buffett didn’t spend decades building his legacy to clip T-bill coupons. That cash represents optionality — waiting patiently for dislocation, distress, and opportunity.

Shepherd’s pie

This is a great, easy ‘comfort food’ dish. One that is good on a cold night as it contains everything you need in one dish. Meat, veggies and mashed potatoes. So, light the fire and curl up on the couch.

For this you need: Carrots, onions, olive oil, ground beef (chuck), butter, frozen peas, corn and green beans, tomato sauce, s&p and olive oil.

You also need peeled potatoes, half and half and butter for the mashed potatoes.

Sauté chopped carrots and onions in some olive oil and a dab of butter until soft – 8 / 10 mins… add ground beef – but use ground chuck – as it has a higher fat content and gives the pie a robust juicy flavor. Season with S&P. Once all browned and cooked nicely – Add in one small can of tomato sauce. Stir to mix. Set aside.

Bring a pot of salted water to a boil and add in the frozen veggies. Bring back to a boil and then strain. Add in a dollop of butter to coat.

Grease your Pyrex baking dish with butter and add the beef mixture. Now put the buttered veggies on top and then cover with the homemade mashed potatoes. You can sprinkle some grated parmigiana cheese on top. Put in the oven and bake for about 20 mins or until the mashed has a golden-brown tint.

When done – remove from oven – and let stand for 5 mins. Serve on warmed plates.