Market Insights Recap — Week of January 5, 2026

Hello, I'm Steve Orr, Chief Investment Officer for Texas Capital’s Private Bank.

Happy new year. Stalled stocks and what's coming. What do they mean for our portfolios? What should we be thinking about?

Now history does rhyme. We humans do take comfort in things we know, and we do know, thanks to our trusty dusty Stock Traders Almanac, that a positive Santa rally followed by a strong first five days of the year for stocks should bode well for the full-year returns. We'll see. The Santa rally concludes Monday the 5th. The first five days of trading, Thursday the 8th. If the S&P 500 posts negative returns for those two periods, dips in the stock indexes are likely later in the year. This fits with mid-term election years, which usually see a consolidation or mild correction in the middle of the year. Again, these are not things that have to happen. Just letting you know what the predominant historical pattern is. Now the S&P 500 and Nasdaq’s recent stalling out near all-time highs is not a concern yet. Low volume and lots of folks being out for the holidays is the usual culprit. So let's get this first week of trading under our belts and see where things stand. 

Well, we've talked at length about how events can rattle markets temporarily, but rarely change the long-term trend. Silicon Valley Bank in 2023 and Trump tariff trauma last year are two good examples that drop stock indices between 8 and 20%. Now they quickly recovered once markets figured out that company earnings would not take a big hit. Now, last year, Silver's big rise, kind of the final nail in the "cheap goods" era of the last 30 years. Spot silver prices spiked into a bubble four times since 1980, and each time they retreated very quickly. Now this time, we think they may stay relatively high. Why? Because China announced export controls effective last Thursday. These controls restrict 60 to 70% of the world's refined silver supply. Is it going to rattle stocks? Higher metal prices are already crimping margins for manufacturing firms, and the broader tech-led indices, they're going to fare OK. We think producer prices are going to continue to crawl higher, and commodity strength in general is going to help value stocks this year. 

But what else is on the horizon? The Supreme Court ruling on Trump's use of the IEEPA statute should come down sometime in the first quarter. On January 30, the U.S. government funding expires, so here comes another shutdown. Chinese New Year starts February 17. At the moment, Trump is scheduled to visit China in April, and May 15 is Chairman Powell's last day as Fed chair. So there's plenty of excitement on tap.

Now rates, we think they're going to go higher over the course of the year if we do get our expected economic growth. And stocks do lead the economy by six months to a year. The last three years of strong stock returns bode well for improving earnings in the economy. Now, there are nine cases in the modern era where the S&P 500 has had three straight years of 10% or higher returns. And in five of those cases, returns were negative in year four. So history does rhyme. We do expect a bumpy ride for stocks this year, but ultimately finishing the year in the green again. 

Our indicator dashboard does show green for the economy and steady for rates, and steady for small- and large-cap stocks. So stay alert. Happy new year; 'til next time.