Monday Morning Markets ...
Market Outlook
This is our Monday Morning Markets Update. Every week we update our analysis of equities, bond yields, exchange rates, commodity prices and crypto. Prices marked Saturday 10th January 2026.
Top line ...
A record number of fund managers see stocks as overvalued, but the majority remain bullish, according to the Bank of America global fund manager survey in the short term. We model in a 15% to 20% correction in the US and Europe and a 20% to 25% adjustment in Hang Seng and Nikkei with a more modest adjustment in 10% to 15% in Shanghai.
"Cash no longer Trash, (Jamie Dimon), Bonds are Garbage ( Bill Gross), Equities Are Overvalued (Everyman), Bitcoin is worthless (Jamie Dimon), Most NFTs are junk (John Hargrave)". "Crypto is a ‘hot ball of money’ with very little intrinsic value", says hedge fund Starkiller Capital.
When it comes to understanding market moves, "Any explanation is better than none" (Nietzsche). Be careful out there ... and remember ... "To understand the markets, you have to understand the economics" ... and we do!
This is our Monday Morning Markets Update. Every week we update our analysis of equities, bond yields, exchange rates, commodity prices and crypto. Prices marked Saturday 10th January 2026.
Top line ...
A record number of fund managers see stocks as overvalued, but the majority remain bullish, according to the Bank of America global fund manager survey in the short term. We model in a 15% to 20% correction in the US and Europe and a 20% to 25% adjustment in Hang Seng and Nikkei with a more modest adjustment in 10% to 15% in Shanghai.
"Cash no longer Trash, (Jamie Dimon), Bonds are Garbage ( Bill Gross), Equities Are Overvalued (Everyman), Bitcoin is worthless (Jamie Dimon), Most NFTs are junk (John Hargrave)". "Crypto is a ‘hot ball of money’ with very little intrinsic value", says hedge fund Starkiller Capital.
When it comes to understanding market moves, "Any explanation is better than none" (Nietzsche). Be careful out there ... and remember ... "To understand the markets, you have to understand the economics" ... and we do!
Disclaimer: This "Monday Morning Markets" analysis is for information purposes only and does not constitute 'investment advice' as defined by the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. We are not authorized or regulated by the Financial Conduct Authority (FCA). No part of this material should be construed as an offer, solicitation, or recommendation to buy or sell any financial instrument."
We do not provide licensed financial or investment advice. We do not take into account the specific investment objectives, financial situation, or particular needs of any individual. You should consult with a qualified professional before making any financial decisions."
We do not provide licensed financial or investment advice. We do not take into account the specific investment objectives, financial situation, or particular needs of any individual. You should consult with a qualified professional before making any financial decisions."
Monday Morning Markets ... Equities ...
We track ten markets in our global equities model. The Dow, S&P and NASDAQ in the U.S.A, the FTSE, CAC and Dax in Europe. In Asia, Nikkei, Hang Seng, Shanghai and BSE feature.
US indices rally: Up 1.9%, driven by a 2.3% rise in the Dow and a near 2% up turn in Nasdaq.
Europe positive: The FTSE was up by 1.7%, CAC was up 5.3%, Dax up at 2.99%. Overall Europe the best regional area up 3.3%.
Asia mostly mixed: Hang Seng down 0.4%. Nikkei up 3.2%, Shanghai up 3.8%. Overall a 2.2% gain in Asian stocks.
A moderately strong week overall with a 2.0% gain.
In our forward outlook, We model in a 15% to 20% correction in the US and Europe and a 20% to 25% adjustment in Hang Seng and Nikkei with a more modest adjustment in 10% to 15% in Shanghai.
We track ten markets in our global equities model. The Dow, S&P and NASDAQ in the U.S.A, the FTSE, CAC and Dax in Europe. In Asia, Nikkei, Hang Seng, Shanghai and BSE feature.
US indices rally: Up 1.9%, driven by a 2.3% rise in the Dow and a near 2% up turn in Nasdaq.
Europe positive: The FTSE was up by 1.7%, CAC was up 5.3%, Dax up at 2.99%. Overall Europe the best regional area up 3.3%.
Asia mostly mixed: Hang Seng down 0.4%. Nikkei up 3.2%, Shanghai up 3.8%. Overall a 2.2% gain in Asian stocks.
A moderately strong week overall with a 2.0% gain.
In our forward outlook, We model in a 15% to 20% correction in the US and Europe and a 20% to 25% adjustment in Hang Seng and Nikkei with a more modest adjustment in 10% to 15% in Shanghai.
Monday Morning Markets ... Currencies
Sterling vs dollar: GBP/USD traded between about 1.341 and 1.356, ending the week near the lower end as renewed dollar strength ahead of US payrolls weighed on sterling.
Sterling vs euro: GBP/EUR broke above prior resistance around 1.147–1.149 toward 1.15–1.157, leaving the pound on track for a fourth straight weekly gain versus the euro.
Euro vs dollar: EUR/USD stayed in a tight mid‑1.17 range, slipping slightly as the dollar firmed but remaining in a broader uptrend, with the ECB reference near 1.1642 on 9 Jan 2026..
Sterling vs dollar: GBP/USD traded between about 1.341 and 1.356, ending the week near the lower end as renewed dollar strength ahead of US payrolls weighed on sterling.
Sterling vs euro: GBP/EUR broke above prior resistance around 1.147–1.149 toward 1.15–1.157, leaving the pound on track for a fourth straight weekly gain versus the euro.
Euro vs dollar: EUR/USD stayed in a tight mid‑1.17 range, slipping slightly as the dollar firmed but remaining in a broader uptrend, with the ECB reference near 1.1642 on 9 Jan 2026..
Monday Morning Markets ... Bond Yields ...
US Ten year yields were at 4.19 from 4.173. UK ten year gilts were at 4.37 from 4.53. Japanese yields up 3 points at 2.08 from 2.05.
Both UK gilts and US Treasuries 10-year yields drifted in the week, US bond yields pushed lower by the promise of lower inflation and lower rates.
Spread stays stable: The UK 10-year continues to trade at a modest 35–45 bp premium over the US 10-year, a spread that has held broadly stable as both markets moved in the same direction.
In the UK, prior to the Great Financial Crash [2000 - 2008] the average inflation rate was 2.0%, the average UK bank rate was 4.50%. Ten year gilt yields averaged 4.50%. Thirty year gilts averaged 4.60%. The average growth rate was 2.5%. The average unemployment rate was 5.0%. Earnings averaged 3.9%.
US Ten year yields were at 4.19 from 4.173. UK ten year gilts were at 4.37 from 4.53. Japanese yields up 3 points at 2.08 from 2.05.
Both UK gilts and US Treasuries 10-year yields drifted in the week, US bond yields pushed lower by the promise of lower inflation and lower rates.
Spread stays stable: The UK 10-year continues to trade at a modest 35–45 bp premium over the US 10-year, a spread that has held broadly stable as both markets moved in the same direction.
In the UK, prior to the Great Financial Crash [2000 - 2008] the average inflation rate was 2.0%, the average UK bank rate was 4.50%. Ten year gilt yields averaged 4.50%. Thirty year gilts averaged 4.60%. The average growth rate was 2.5%. The average unemployment rate was 5.0%. Earnings averaged 3.9%.
Monday Morning Markets ... Oil Prices Brent Crude ...
Oil prices Brent Crude basis moved to $63.34 from $60.75 last week. Brent Crude up 4.3% in the week and trades at $65.44 mid week as markets digest Venezuelan developments.
Brent crude is projected to trade between $65 and $75 a barrel in 2026. The EIA outlook is considerably bearish on the price outlook for 2026. EIA forecast Brent crude oil price will fall to an average of $54 per barrel (b) in the first quarter of 2026 (1Q26) and average $55/b for all of this year.
Oil Supplement : EIA Short term outlook December
Global oil prices. We [EIA] expect global oil inventories to continue to rise through 2026, putting downward pressure on oil prices in the coming months. We forecast the Brent crude oil price will fall to an average of $55 per barrel (b) in the first quarter of 2026 (1Q26) and remain near that price for the rest of next year. Although we expect crude oil prices to continue to fall in the coming months, we assess that both the OPEC+ production policy and China’s continued inventory builds will limit price declines.
January Update. We [EIA] expect oil prices will decline in 2026, as global oil production exceeds global oil demand, causing oil inventories to rise. Global inventories continue increasing into 2027, albeit at a slower pace. We forecast the Brent crude oil price will average $56 per barrel (b) in 2026, 19% less than in 2025, then average $54 dpb in 2027.
Oil prices Brent Crude basis moved to $63.34 from $60.75 last week. Brent Crude up 4.3% in the week and trades at $65.44 mid week as markets digest Venezuelan developments.
Brent crude is projected to trade between $65 and $75 a barrel in 2026. The EIA outlook is considerably bearish on the price outlook for 2026. EIA forecast Brent crude oil price will fall to an average of $54 per barrel (b) in the first quarter of 2026 (1Q26) and average $55/b for all of this year.
Oil Supplement : EIA Short term outlook December
Global oil prices. We [EIA] expect global oil inventories to continue to rise through 2026, putting downward pressure on oil prices in the coming months. We forecast the Brent crude oil price will fall to an average of $55 per barrel (b) in the first quarter of 2026 (1Q26) and remain near that price for the rest of next year. Although we expect crude oil prices to continue to fall in the coming months, we assess that both the OPEC+ production policy and China’s continued inventory builds will limit price declines.
January Update. We [EIA] expect oil prices will decline in 2026, as global oil production exceeds global oil demand, causing oil inventories to rise. Global inventories continue increasing into 2027, albeit at a slower pace. We forecast the Brent crude oil price will average $56 per barrel (b) in 2026, 19% less than in 2025, then average $54 dpb in 2027.
Monday Morning Markets ... Bitcoin ...
We mark Bitcoin at $90,667 from $89,692. Bitcoin up 1.1% this week, Bitcoin rallied over the week in a relatively tight range, pointing to consolidation after prior volatility rather than a big breakout, still well below the $126,000 October peak.
The technical trend rate is emerging of head and shoulders with a $80,000 downside. Continued risk-off sentiment in cryptocurrency markets could see a drop to $70,000. The level may offer support with a $70,000 - $80,000 short term floor. Expect a pull back.
We mark Bitcoin at $90,667 from $89,692. Bitcoin up 1.1% this week, Bitcoin rallied over the week in a relatively tight range, pointing to consolidation after prior volatility rather than a big breakout, still well below the $126,000 October peak.
The technical trend rate is emerging of head and shoulders with a $80,000 downside. Continued risk-off sentiment in cryptocurrency markets could see a drop to $70,000. The level may offer support with a $70,000 - $80,000 short term floor. Expect a pull back.
Monday Morning Markets ... Gold $...
We mark Gold at $4,510 from $4,323 last week. Up 4.3% in the week, holding above the $4,500 level supported by market concerns following Venezuelan developments and continued central-bank demand led by China.
The outlook for gold prices in 2026 remains predominantly bullish, with most analysts and financial institutions projecting significant increases. $5,000 the favored target. The over extension against trend evident from our chart. A pull back to $2,000 would not be a huge shock. Central bank buying offers huge support.
Warren Buffett’s case against the metal argues gold’s intrinsic value is no more than the cost of producing it, which in 2024 was somewhere around $1,500 an ounce across the bulk of the major miners. The all-in sustained cost (AISC) of production can therefore be seen as a potential floor for gold.
We mark Gold at $4,510 from $4,323 last week. Up 4.3% in the week, holding above the $4,500 level supported by market concerns following Venezuelan developments and continued central-bank demand led by China.
The outlook for gold prices in 2026 remains predominantly bullish, with most analysts and financial institutions projecting significant increases. $5,000 the favored target. The over extension against trend evident from our chart. A pull back to $2,000 would not be a huge shock. Central bank buying offers huge support.
Warren Buffett’s case against the metal argues gold’s intrinsic value is no more than the cost of producing it, which in 2024 was somewhere around $1,500 an ounce across the bulk of the major miners. The all-in sustained cost (AISC) of production can therefore be seen as a potential floor for gold.
That's all for this week ... "to understand the markets you have to understand the economics" and we do ...
© 2025 John Ashcroft, Economics, Strategy and Financial Markets, experience worth sharing.
The material is based upon information which we consider to be reliable but we do not represent that it is accurate or complete and it should not be relied upon as such. We accept no liability for errors, or omissions of opinion or fact. In particular, no reliance should be placed on the comments on trends in financial markets. The receipt of this communicaion should not be construed as the giving of advice relating to finance or investment.
© 2025 John Ashcroft, Economics, Strategy and Financial Markets, experience worth sharing.
The material is based upon information which we consider to be reliable but we do not represent that it is accurate or complete and it should not be relied upon as such. We accept no liability for errors, or omissions of opinion or fact. In particular, no reliance should be placed on the comments on trends in financial markets. The receipt of this communicaion should not be construed as the giving of advice relating to finance or investment.
