The first quarter of 2026 may turn out to be quite positive for risk assets. Here’s why.
- A Less-Than-Taxing Matter: The “Big Beautiful Bill” included a key provision that offered a one-year 100% depreciation allowance to companies for capital expenditures. Companies have a clear incentive to spend heavily to get that tax deduction and enjoy the earnings bump. This provision is positive both for the economy as well as headline SPX earnings, so we should see impressive prints in both respects. Speaking of tax-related tailwinds, many high-income earners should see significant refunds this year. To the extent this boosts domestic consumption rather than imports, the headline trade deficit (and hence GDP growth) should increase.
- Markets Won’t be Fed Up: Putting aside the current friction between the Federal Reserve and Trump administration, we still think monetary policy will be bullish for equities and other risk assets in the near-term. Our analysis suggests that the U.S. economy remains weak (despite the tax factors we mentioned), which should result in multiple rate cuts in 2026. Whoever Trump nominates as the new Fed chair will be under pressure to deliver on the President’s dovish expectations. What’s more, the central bank is starting to expand its balance sheet once again, which historically has been well-received by investors.
- The Shine Stays on Precious Metals: We’ve been vocal about our bullish stance towards gold and silver and in our view the trend of higher prices seems set to continue this quarter. The debasement trade roars on, as investors around the world seek refuge from sky-high government debt levels and a clear incentive to inflate away these obligations. Gold moved first, but silver has since played catch-up. The latter also benefits from large structural deficits (around 95 million ounces per the Silver Institute). The path higher won’t be without volatility, but all signs point to the shine staying on precious metals.
Important Information:
The foregoing is general market and economic commentary prepared by Kurv investment professionals as of 02/10/2026. The commentary is neither to be construed as general investment advice nor personalized investment advice. Our commentary is subject to change based upon our views of market, economic, political and related factors. We are under no obligation to provide updated commentary if our views change. To the extent the commentary covers market segments, market sectors, industries, commodities or other securities please note that Kurv professionals may effect transactions in such market segments, market sectors, industries, and commodities or other securities which presents a conflict of interest. All Kurv investment professionals are subject to the firm’s Code of Ethics policy.
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