Ideas
Overweight global equities for year-end gains
The global macro backdrop looks terrific and he expects a macro acceleration in 2026: the Fed is cutting rates and has stopped QT, and broadening global markets come with that. He remains overweight equities and expects them higher by year-end, though with rocky 5%-10% pullbacks along the way, especially with midterm-year history in mind.
Tech oversold; leadership to shift back
Technology is oversold relative to the market, still has good earnings growth and a great story, and the bubble has not fully played out; he expects market leadership to shift back toward tech.
Credit spreads complacent, underpricing weak economy
Credit markets are the tightest since 2007 while the bottom half of the US economy is weak, so credit is hugely underpricing risk; he calls it a great example of complacency and expects risk-off episodes of roughly 5%-10% before markets reset higher.
Watch yen intervention; needs hawkish BoJ
Finance Ministry jawboning alone will not turn the yen; intervention could come over the long US weekend and could even be coordinated with the US, but it only works sustainably if the Bank of Japan turns more hawkish and wage and underlying inflation data strengthen.
Sterling downside skew into UK data
Sterling faces an asymmetric week: with the market no longer heavily short the pound, strong UK data is unlikely to lift it much, while soft data could hit it as markets bring forward expectations for Bank of England rate cuts.
Dollar upside on stronger US data
Last year's big position unwind means the market is no longer long the dollar, so the dollar can rally on positive US news, particularly if the Fed cannot cut rates as fast or the economy proves stronger than expected.
Euro vulnerable in Greenland escalation
In a worst-case Greenland escalation, attacking the Danish krone and its euro link is impractical, but the euro would come under pressure because the logic of NATO Article 5 would be undermined and Russia would look like a bigger threat to Europe.
Keep positioning in gold as hedge
Geopolitical event risk over the long US weekend and uncertainty over oil prices mean investors are likely to keep positioning in gold as a hedge.
Inflation will exceed 2.3% breakeven
The market is complacent about inflation: protectionism, nationalism and demand-stoking policies are inflationary with a lag, and the 2.3% ten-year inflation breakeven will prove much too low, so he wants protection against a real inflation problem going into 2027.
Alphabet: market multiple, self-funded capex
He loves Alphabet because it trades at a market multiple with great growth while funding its huge capex internally; owning strong cash-generating companies at market multiples is his way to mitigate the 2022-style risk that inflation kills high-multiple stocks.
Short Oracle: debt-funded, unproductive capex
He is short Oracle to offset the risk from unproductive capex spending: it is funding everything it does with debt while trying to disrupt the Mag Seven hyperscalers, which becomes nearly impossible if inflation, higher rates and wider credit spreads arrive.
Short SoftBank: unprofitable AI hopefuls
He is short SoftBank, which holds a bunch of unprofitable tech companies hoping for an AI bubble and a possible ChatGPT IPO; he prefers to be long companies producing cash today and short aspirational companies without earnings.
Short STMicroelectronics; valuation too rich
He has just shorted STMicroelectronics because the stock has become too expensive for his framework, even though he remains selective within European tech.
ASML dominant position justifies ownership
ASML makes sense to him despite looking expensive because of its dominant market position, making it one of the European tech names he is comfortable owning.
Europe must rearm; defense tailwinds
He likes European defense: there will be no peace deal with Russia, Europe has to rearm for many reasons, and that creates structural tailwinds for defense revenues and earnings, financed partly by government bond issuance.
Stay with European banks on performance
He likes European banks and is sticking with them despite rich price-to-book valuations, letting the position keep growing in the portfolio after strong performance, even without adding recently.
Bullish European economy on defense stimulus
He is bullish on the European economy, though only modestly (about 1.2% growth support), because defense-driven government bond issuance amounts to fiscal stimulus for the region.
Avoid gold; speculative, sellable in stress
He does not like gold: it is a speculative asset at this point and, after a big run, will be a source of funds in the next liquidity-driven selloff.
Gold miners cheap, geared to bullion
He added Barrick and gold miners now make up about 25% of the fund's equities: at $4,600 gold they generate huge cash flows, earnings and dividends even if gold goes nowhere, they are geared to gold upside, and they are cheaper on earnings after underperforming gold over three years, with still-small index weights.
Micron: earnings forecasts outrun share price
He loves stocks like Micron that keep getting cheaper as they rise because earnings forecasts keep outperforming the share price, and he likes to ride that momentum.
This Bloomberg Markets video, published January 16, 2026,
features Chris Watling, Jane Foley, Skyler Montgomery Koning, Patrick Armstrong
discussing VT, XLK, Credit spreads, FXY, GBP, USD, FXE, GLD, US 10-year inflation breakevens, GOOG, ORCL, SFTBY, STMPA, ASML, European Defense, EUFN, VGK, B, GDX, MU.
20 trade ideas extracted by AI with direction and confidence scoring.
Speakers:
Chris Watling,
Jane Foley,
Skyler Montgomery Koning,
Patrick Armstrong
· Tickers:
VT,
XLK,
Credit spreads,
FXY,
GBP,
USD,
FXE,
GLD,
US 10-year inflation breakevens,
GOOG,
ORCL,
SFTBY,
STMPA,
ASML,
European Defense,
EUFN,
VGK,
B,
GDX,
MU
