By Eric Parnell, CFA on January 27, 2026January 27, 2026 “Tuesday’s gone with the wind” –Tuesday’s Gone, Lynyrd Skynyrd, 1973 It has certainly been a rousing start to the New Year. No sooner did the ball drop on Times Square and the President of Venezuela was making an unexpected visit to the United States, Iranian protesters were flooding into the streets, and sabers were rattling between the United States and NATO (!?!) over control of Greenland. Living in interesting times indeed! Now much fuss has been made in the financial media since the calendar has flipped to 2026 about the tumultuous effects this news flow has had on financial markets. But has it really? Frankly, my dear, I don’t give a damn. Let’s consider the headline S&P 500 Index, the market cap weighted benchmark that is now roughly 50% allocated to the technology sector if you throw in a few of the leading former tech and tech adjacent names such as Alphabet (Google), Meta Platforms (Facebook), Amazon, Tesla, Visa, and MasterCard. Does the psychologically important but otherwise meaningless 7000 mark remain frustratingly elusive? Sure. But the headline index is still trading marginally higher for the year to date, which can hardly be described as any form of market turmoil. What about Tuesday when the S&P 500 along with its NASDAQ 100 counterpart plunged by more than -2% in the wake of the Greenland brouhaha over the weekend? Gone with the wind, as stocks have rallied by more than +2% since, effectively wiping away the momentary blip. We didn’t even retest the sharply upward sloping 100-day moving average, for goodness sake, much less see anything that could even be described as roiling capital markets. But let’s not stop there. A key theme garnering investor consternation over the past couple of years has been the extraordinary concentration of stock market returns. The tech sector didn’t grow to become nearly 50% of the S&P 500 out of nowhere after all (quick aside: a sector weight north of 20% has historically been a major “bubble” warning sign, so the 34% official weight to the tech sector today is notably significant (not saying it’s a “bubble” btw, but it does merit monitoring)). So how has the rest of the market been holding up since the start of the year? Check it. When looking at the equal weighted S&P 500 where tech ranks as the third largest sector at 13% of the index, it is already up nearly +4% YTD. U.S. mid-cap stocks as measured by the S&P 400 are doing even better at nearly +6% higher so far in 2026. What about long downtrodden publicly traded U.S. small caps that have been supposedly getting squeezed out by private equity in recent years? Surging by as much as +9% in the first fourteen trading days of the year, which equates to something like +150% annualized for the year if this continues through the rest of the year (which of course it won’t, but if markets were truly being staggered by recent geopolitical news, we wouldn’t be talking about a more economically sensitive area of the market on track for triple digit returns so far this year). With 61% of stocks within the S&P 500 outperforming the overall index so far this year, this is long anticipated broadening of market returns truly playing itself out. Not only is this highly constructive for stocks going forward, but this is not necessarily a new development, as 52% of stocks in the S&P 500 have outperformed the overall index since the start of 2025 Q4. This is broadening that is now four months in the making and coming in the context of a headline index that is continuing to press new all-time highs. Very good stuff. What about stocks across the rest of the world? Both developed international and emerging market stocks are also higher by more than +7% year to date. And these are not currency effects driving these upside results so far in 2026, as the US Dollar index is effectively flat relative to global currencies so far this year. This is real honest to goodness positive returns coming in from the rest of the world. Throw in the fact that the latest data driven GDP forecasts from the Atlanta and New York Fed have the U.S. economy continuing to grow GDP at a robust rate, inflation expectations that remain largely in check despite a recent blip higher, and corporate earnings that are still projected to grow in the +15-20% range on an as reported (GAAP) basis in the coming year, and we’re looking at a most constructive investment market environment as the first month of the year starts to draw to a close. If this is market calamity, I’ll take a whole lot more of it thank you very much! We’ve seen this story for five years and counting. A lot of things get said, and a lot of things happen, but as long as the fundamentals remain strong and the markets are getting the liquidity they want, capital markets will remain poised to continue to do just fine. “Well, when this train ends, I’ll try again, alright” –Tuesday’s Gone, Lynyrd Skynyrd, 1973 I’ll think about that tomorrow. With such resoundingly positive sentiment to start out this latest missive, why go any further? Because there is a bigger story that must be told. We are not necessarily seeing it manifest itself in the stock market today, but it’s coming. In fact, it’s already been underway for a few years now. And while stock investors remain understandably inclined to think about that tomorrow, the time to continue considering it and incorporating into our portfolio modeling strategy remains today. So, what’s happening? The world continues to change, and it is doing so fairly rapidly. Let’s quickly reflect on the recent before times. Since the fall of the Soviet Union in 1991 (having grown up as a cold war kid worried about the threat of global thermonuclear war (bonus points for knowing the movie reference – Bueller?) and trained to seek cover under my elementary school desk (I’m still not sure how that was going to help, but whatever, it’s was break from class), I can still remember the early morning rainy day in August 1991 arriving for preseason soccer camp during my senior year in high school when the assistant coach, who was also a social studies teacher, broke the news of the failed hardline coup that effectively marked the beginning of the end – the world has certainly changed ever since), the global economy transitioned from iron curtains and spheres of influence to kumbaya and globalization. This fostered an historically unprecedented period of economic prosperity where production specialization could be optimized globally, and production possibilities curve shifted steady outward over time. This also supported an environment of persistent disinflation and seemingly perpetual price stability. If anything, policy makers eventually struggled mightily to ward off deflation and keep prices rising toward an arbitrary 2% target (not sure why 2% inflation ended up becoming the magic number, as I always saw the equally arbitrary 3% inflation number in my macro textbooks from the late 20th century, but hey, economics is a social science with a lot of assumptions). But this is no longer our world in the after times. And while we are seeing these forces play out in the bond market and precious metals, the stock market has yet to react or adjust to the new reality. While the change had been coming arguably for decades prior – I would argue one could go all the way back to the Russian invasion of Georgia (the country) back in 2008 if not earlier to find the seeds of where we are today – the seminal event marking the new world change in my view took place in February 2022 with the Russian invasion of the Ukraine. What is this new global reality going forward over the next ten to fifteen years? I’ll bottom line it. Globalization is giving way to deglobalization (globalization is increasing, but at a diminishing rate). Global integration is giving way to spheres of influence. Kumbaya is fading away and iron curtains are starting to form. The pendulum is moving in the opposite direction. What does this mean from an economic and capital markets perspective? Let’s start with the likely effects on the global economy all else equal. Reduced rates of economic growth. Higher levels of inflation. Narrower corporate profit margins. Slower rates of corporate earnings growth. Moving on to the likely effects on capital markets, particularly given the already chronically high and rising level of sovereign debt globally coupled with an increasingly challenging demographic outlook in many countries around the world. Higher government bond yields, which imply higher borrowing costs given the historically tight spreads for virtually everything relative to government bond yields. Greater demand for real assets both for financial and national security reasons. Lower stock valuations. Increased stock price volatility. All of this sounds like it might be something to worry about. Perhaps if you’re someone that’s inclined toward nostalgia and resistant to change. But opportunistic investors are those that not only move quickly to ride their blues away but recognize that the geopolitical and economic environment train rolls on. And it is important to also know that some of the best investment environments throughout history have not been when asset prices of all colors are rising relentlessly from the lower left to the upper right. Instead, innovation is rewarded, and fortunes are made during periods of market uncertainty and turbulence, for these are the times when assets can be acquired and accumulated at some of their most attractive prices. One has to look no further than the likes of Warren Buffet to see how well it can all work out. And we’re only at the beginning of this next great era for capital markets. I’ll close this latest missive not with a bottom line but a preview. We will continue as always to focus on the market in front of us today. After all, it is in the current environment where the boots on the ground decisions are made on the margins from a portfolio management standpoint. But we will also be increasingly focusing on how this new world order is starting to take shape, for it will help inform how we are continuing to position from an asset allocation strategy standpoint for the events that are only now starting to unfold over the next decade or more. I look forward to sharing this next great journey with you. Ride on train. Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. Investment advice offered through Great Valley Advisor Group (GVA), a Registered Investment Advisor. I am solely an investment advisor representative of Great Valley Advisor Group, and not affiliated with LPL Financial. Any opinions or views expressed by me are not those of LPL Financial. This is not intended to be used as tax or legal advice. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Please consult a tax or legal professional for specific information and advice. LPL Compliance Tracking #1054749. Eric Parnell, CFA Chief Market Strategist Eric Parnell is the Chief Market Strategist for Great Valley Advisor Group. Eric applies his expertise in finance and economics to manage multi-asset portfolios, mitigate risk, deliver advice that promotes informed decision-making, and facilitate investors achieving their short-and long-term investment goals. He leads the GVA Asset Management platform overseeing the management of asset allocation models for GVA advisors and their end clients. See Full Bio