bigjom jom / Shutterstock.com Quick Read AVEM returned 35% in 2025 and beat VOO and VTI by roughly 17 percentage points. The fund holds $15.1B in assets with 6.35% in Taiwan Semiconductor. Dollar weakness drove 2025 outperformance. A 9% dollar decline boosted emerging market returns. If you’re thinking about retiring or know someone who is, there are three quick questions causing many Americans to realize they can retire earlier than expected. take 5 minutes to learn more here The Avantis Emer ...

Market Outlook - Deutsche Bank projects the S&P 500 to reach a price target of 7500 by the end of 2026, anticipating the US market to slightly outperform international stocks and a stabilization of the dollar [1][4]. Dollar Performance - The dollar experienced significant weakness in 2025 but is expected to stabilize in 2026, with a forecast of the dollar at 115 and dollar-yen at 145 over the next 12 months [5][4]. - The dollar's performance is influenced by the strength of the US economy, which is generating double-digit returns in equity markets, attracting fund flows [4][5]. Geopolitical Factors - Geopolitical conditions are expected to be more stable in 2026 compared to 2025, with fewer crises affecting oil markets, which are sensitive to political developments [6][4]. Political Influence on Markets - The midterm election year is anticipated to create a unique market narrative, with positive performance in the first and fourth quarters, but potential sideways movement in the second and third quarters [8][7]. - Tax incentives and a projected 20% year-over-year increase in tax refunds in the first half of the year could stimulate consumer spending and market activity [9][10]. Economic Drivers - The current economic growth is primarily driven by non-residential fixed asset investments, particularly in AI data centers, but there is a need for consumer spending to contribute significantly to GDP growth [12][11].

January WTI crude oil (CLF26) on Friday closed down -0.16 (-0.28%), and January RBOB gasoline (RBF26) closed down -0.0077 (-0.44%). Crude oil and gasoline prices moved lower on Friday, with gasoline posting a 4.75-year nearest-futures low.  Friday's dollar strength weighed on energy prices.  Also, Friday's stock weakness has dampened optimism about the economic outlook, a negative factor for energy demand and crude prices.  In addition, concerns about a global oil glut continue to pressure crude prices. ...

Core Insights - The article emphasizes the importance of conducting thorough due diligence before making any financial decisions, particularly in the context of investments and trading activities [1] Group 1 - The content includes general news and personal analysis intended for educational and research purposes [1] - It highlights that the information provided does not constitute any recommendation or advice for investment actions [1] - The article warns that the information may not be accurate or provided in real-time, and prices may be sourced from market makers rather than exchanges [1] Group 2 - The website discusses complex financial instruments such as cryptocurrencies and contracts for difference (CFDs), which carry a high risk of losing money [1] - It encourages users to perform their own research and understand the risks involved before investing in any financial instruments [1] - The article states that FX Empire does not endorse any third-party services and is not liable for any losses incurred from using the information provided [1]

Core Insights - The article emphasizes the importance of conducting thorough due diligence before making any financial decisions, particularly in the context of investments and trading activities [1] Group 1 - The content includes general news and personal analysis intended for educational and research purposes [1] - It highlights that the information provided does not constitute any recommendation or advice for investment actions [1] - The article warns that the information may not be accurate or provided in real-time, and prices may be sourced from market makers rather than exchanges [1] Group 2 - The website discusses complex financial instruments such as cryptocurrencies and contracts for difference (CFDs), which carry a high risk of losing money [1] - It encourages users to perform their own research and understand the risks involved before investing in any financial instruments [1] - The article states that FX Empire does not endorse any third-party services and is not liable for any losses incurred from using the information provided [1]

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) rose by +0.37%, reaching a 3-month high, driven by increased liquidity demand due to a slump in equity markets and support from Fed Chair Powell's comments on interest rates [1] - The ongoing US government shutdown is exerting pressure on the dollar, with a longer shutdown likely to harm the US economy and increase the chances of Fed interest rate cuts [2] - October Wards total vehicle sales slowed to 15.32 million, below expectations of 15.50 million, marking the lowest sales in 14 months, contributing to bearish sentiment for the dollar [3] Group 2: Eurozone Economic Outlook - The euro (EUR/USD) fell by -0.36%, reaching a 3-month low, primarily due to the strength of the dollar and comments from ECB officials regarding growth risks in the Eurozone [3] - ECB Governing Council member Stournaras highlighted multiple downside risks to Eurozone growth, including trade policy uncertainty and geopolitical tensions, which negatively impacted the euro [4] - ECB member Rehn noted that Eurozone growth remains sluggish but resilient, with inflation risks being two-sided, emphasizing the need for flexibility in interest rate decisions [4]

Core Insights - The content emphasizes the importance of conducting personal due diligence before making any financial decisions [1] Group 1 - The website provides general news, personal analysis, and third-party content for educational and research purposes [1] - It explicitly states that the information should not be interpreted as investment advice or recommendations [1] - Users are encouraged to consult their own advisors and consider their financial situation before making decisions [1] Group 2 - The website includes information on complex financial instruments such as cryptocurrencies and CFDs, which carry a high risk of loss [1] - It highlights the necessity for users to understand these instruments fully before investing [1] - The content warns that trading decisions made based on the information provided are the sole responsibility of the user [1]

Inflation & Commodities - The Fed's concern about inflation primarily stems from the service sector, while goods prices have remained relatively stable since the beginning of the year [2][5] - A weaker dollar has contributed to the rise in commodity prices, but a stronger dollar could potentially lessen the risk of inflation through commodities [3] - Commodity market strength reflects strong US GDP numbers, with the latest data showing a growth handle of 3% plus [5] - Oil prices are easing as tensions in the Middle East decrease, creating a mixed picture for commodities [4][14] Emerging Markets & Dollar Strength - Rising commodity prices generally benefit emerging markets, particularly Brazil, Chile, and South Africa [6][7] - Asian markets, such as India, may be less beneficial from rising commodity prices as they are commodity importers [7] - While the dollar has gained against developed market currencies, emerging market currencies have shown resilience [9] - If the dollar strengthens more broadly, higher beta currencies in Latin America (Mexico, Brazil) and potentially India could be negatively impacted [10] - The dollar index's rise is partly due to weakening in the Euro and Yen [17] Gold Market - Central bank demand, particularly from China and India, is driving the increase in gold prices [12] - Gold is up about 50% year to date [10] Investment Opportunities - China, South Africa, and Mexico are highlighted as potential beneficiaries in Q4 [15][16] - Potential catalysts for China include the APEC meeting and the five-year plan discussion [15][16] - South Africa could benefit from higher gold prices [7][16] - Mexico could benefit from a reduction in trade tensions and progress on the USMCA agreement [16][17]

Commodity Prices and Inflation - The rise in commodity prices raises concerns about inflation, particularly in the service sector rather than goods pricing, which has remained steady [1][2][5] - The weaker dollar has contributed to the commodity price rally, and a strengthening dollar could lead to lower commodity prices, potentially easing inflation risks [3][4] Impact on Emerging Markets - Historically, rising commodity prices have benefited emerging markets, but the current composition of the MSCI Emerging Markets Index shows a decline in the share of energy and materials from 25% in 2005 to 10% [6] - Specific emerging markets like Brazil and South Africa may benefit from higher commodity prices, particularly gold, while countries like India, which are commodity importers, may face challenges [7][8] Central Bank Demand for Gold - The significant increase in gold prices, up about 50% year-to-date, is largely driven by central bank demand from countries like China and India rather than a fear of the dollar or the U.S. economy [10][12][13] Market Opportunities in Q4 - Key markets to watch include China, which may benefit from upcoming discussions on its five-year plan, and South Africa, which stands to gain from higher gold prices [16][17] - Mexico could also see positive impacts from reduced trade tensions and potential advancements in the USMCA agreement [17] Dollar Strength and Global Economy - The strengthening dollar is partly due to economic challenges in industrial economies like Japan and Germany, indicating a robust U.S. economy that attracts investment away from these markets [18][19]

Currency Market Analysis - The dollar's recent strength suggests underlying fundamentals remain strong [1] - This strength persists despite a potentially weak economy [1] - Challenges to the Federal Reserve's autonomy have not undermined the dollar [1] Source - Barclays' analysis supports the dollar's resilience [1]