The Dividend Cafe Monday - January 26, 2026
Jan 26, 2026
A quick take on market movers, sector winners, and how stormy weather touched trading. Talk of emerging markets rallying as the US dollar softens. A look at bond yields, surging AI capital spending versus stagnant non-tech investment. Discussion of public policy risks like a possible partial government shutdown and the looming Federal Reserve meeting. A warning about market gamification and behavioral pitfalls for investors.
AI Snips
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Transcript
Episode notes
Dispersion Drives Recent Market Moves
- Markets opened up and climbed, with the Dow up over 300 points and communication services leading the sector gains.
- David notes dispersion among winners and losers, with emerging markets as January's top global asset-class performer.
Expect Mid-Year Drawdowns
- Mid-year double-digit drawdowns are common, with average peak-to-trough around 14% and median about 10%.
- David emphasizes that drawdowns are normal even in years that finish strongly and investors should expect them.
Weak Dollar Boosts Emerging Markets
- The US dollar has continued weakening into January after a 9% drop last year, aiding emerging markets and commodities.
- David cautions that FX volatility is high and it's too early to draw broad macro conclusions, but he's watching closely.