Trading update : 1 February 2026

The global investment landscape is currently witnessing a striking geopolitical shift, as European investors begin voting with their feet by diversifying away from US equities due to lingering trade tensions. While the S&P 500 recently breached the historic 7,000 mark, fuelled by an insatiable AI appetite, the market dynamics are shifting; Gold has surged past $5,200, and emerging market currencies are proving popular among carry trade investors.

EU investors talk with their feet

While President Trump has toned down the rhetoric on Europe, concerns linger on Wall Street that his belligerence and belittlement of the continent could take some of the biggest buyers of US equities out of the market. Bloomberg reported that there are already signs this is happening. “We are seeing more clients wanting to diversify away from the US. We saw that trend start in April 2025, but it has somewhat accelerated this week,” said Vincent Mortier, chief investment officer at Amundi SA, Europe’s largest asset manager with €2.3 trillion ($2.7 trillion) in assets under management. European investors own roughly $10.4 trillion in US stocks, and more than half of that total is owned by investors in the eight countries Trump threatened with tariffs.

Tech’s record run

A rally in global tech giants drove stocks to all-time highs after solid results added fuel to the artificial intelligence (AI) trade ahead of the start of the mega-cap earnings season. The S&P 500 (VOO-NASQ) rose to 7,000 for the first time, and the dollar halted its slide, rising 0.3%.

Computer crash

Intel (INTC-NASQ) plummeted -17% following its most recent earnings report as investors realise that the company remains miles behind competitors like TSMC. Major clients remain unconvinced by their product, and the company hasn’t been able to scale up production to meet the massive kick in demand, which means big market share losses.

Stock picker

Hedge fund Bridgewater Associates favours stocks over bonds due to the risks posed by governments increasing public spending and the inflationary impact of artificial intelligence. Bloomberg reports that Bridgewater sees limited room for central banks to lower rates and the potential for inflation to pick up pace.

Carrying favour

Investors selling the US dollar to buy emerging-market currencies are off to a lucrative start to 2026, with strategists expecting these strategies to build further on last year’s rally. Carry trades – a strategy where an investor borrows money at a low interest rate in one currency to invest it in another currency that offers a higher interest rate, pocketing the difference as profit – are already up this year, according to a Bloomberg index tracking returns across eight emerging markets, with currencies from the South African rand to Colombian peso hovering at multi-year highs. Morgan Stanley and the Bank of America see more to come in the best carry trade rally since 2009.

The Midas touch

Gold climbed to a record high above $5,200 an ounce, extending a breakneck rally fuelled by US dollar weakness. The yellow metal has gained about 20% since the beginning of the year.

Going on the defensive

Investors looking for a potential future growth trend should keep an eye on Europe’s defence sector. President Trump’s overtures about acquiring Greenland are reviving questions among the U.S.’s NATO allies over whether Europe can make enough of its own weapons to fight independently of America. Bloomberg reports that defence analysts and lawmakers have concluded that Europe can make enough of its own weapons, but not just yet, as the continent’s defence industry is still developing and has some way to go. The cost of replacing current U.S. military equipment and personnel in Europe would be around $1 trillion, according to the International Institute for Strategic Studies think tank. Some holes remain in the region’s manufacturing capability, including stealth fighters, long-range missiles and satellite intelligence.

Electrifying PGM demand

In an important development for PGM demand, sales of electric vehicles (EVs) in Europe rose 30% to a record high in 2025, with battery-powered models outselling petrol cars for the first time in December. The Financial Times reports that EVs accounted for 17% of EU car sales in 2025, compared with 14% a year earlier. In December, EV sales rose 51% year on year to take a 22.6% share for the month, just above the 22.5% for petrol-driven cars, according to new data from European car industry body Acea. Hybrids and diesel cars accounted for the remainder.

Gaming dominance

Prosus (PRX-JSE) and Naspers (NPN-JSE)-owned Tencent has entered a new era of gaming dominance – a convergence of blockbuster content, platform synergies, and technological leadership. With a robust pipeline, diversified global exposure, and AI-enhanced engagement, Tencent is structurally positioned to outperform peers through the next gaming cycle. Investec analysts forecast that the gaming segment will grow at a compounded annual rate of 16% between 2024 and 2027. Recently, there has been strong momentum in key titles, led by Delta Force’s breakout global launch and robust performance from evergreen titles like Honor of Kings and PUBG Mobile.

In the M&A mix

Private equity firms Bridgepoint Group Plc and Triton Partners are exploring a bid for Spire Healthcare Group Plc. Bloomberg reports that talks are still at a preliminary stage, with Bridgepoint and Triton each required to announce a firm intention to make an offer or declare that they don’t plan to follow through by Feb. 21. Mediclinic (MEI-JSE) owns 30% of Spire, and Remgro (REM-JSE) holds 50% of Mediclinic.

Adios!

Vukile (VKE -JSE) has sold its Spanish retail parks portfolio for €279 million in cash. The management team have indicated that the proceeds with be deployed into investments (new and developments) that deliver better growth.