Thomas Martin of Globalt sees rotation, geopolitical risks shaping 2026
Speakers
Thomas Martin
— Senior Portfolio Manager at Globalt Investments
Summary
Thomas Martin of Globalt Investments discusses tariffs, housing affordability, and geopolitical risks as key market drivers for 2026. He says the Supreme Court tariff ruling is causing uncertainty, but the President has other tools and the focus has shifted to rare earths and critical materials. Housing support from mortgage purchases may be short-term, while geopolitical uncertainty could push the VIX higher but might strengthen US security over time.
- Tariff ruling uncertainty is a major market driver, but President has other tools.
- Tariff concerns have shifted from tariff levels to rare earths and critical materials.
- Consumer discretionary strength is not changing sector weightings in Martin's view.
- Government mortgage purchases may provide only short-term housing affordability relief.
- Longer-term rates are unlikely to be impacted by MBS buying.
- Housing affordability may not improve unless home prices flatten or decline.
- Geopolitical actions raise short-term volatility risk and could lift the VIX.
- If sustained, geopolitical actions could make the US stronger and safer.
Ideas
Tariff focus shifts to rare earths.
Tariff levels have moderated to more reasonable levels, so the key tariff-related market concern has shifted to rare earths and other critical materials, which are more strategically important inputs.
Housing support may be only short-term.
Government purchases of mortgages can lower mortgage rates only short-term and will not impact longer-term rates; housing affordability is unlikely to improve unless home prices flatten or decline, so the policy support may be temporary.
VIX could rise on uncertainty.
The VIX is a potential problem if geopolitical and market uncertainty pushes volatility back up from current low levels around 15.5.
