Update Equities: Greenland deal or not?
Global markets were volatile this week, dominated by escalating tensions between the US and Europe over President Donald Trump’s push to acquire Greenland.
The week began with Trump announcing a 10% tariff on goods from eight European countries and threatening to raise it to 25% unless a Greenland deal was reached. The EU prepared retaliatory measures, including tariffs on EUR 93 billion of US goods. The S&P 500 index erased its year‑to‑date gains amid the geopolitical strain, volatility surged to multi‑month highs and investors moved into safe‑haven metals, with both gold and platinum hitting fresh records.
Luckily, investor sentiment improved slightly during the week, after Trump signaled he would pause further tariff hikes and referred to an agreed framework of a future deal on Greenland, without specifying details. Equity markets rebounded, with Wall Street closing higher across sectors. But still, European leaders maintained a readiness to retaliate, and diplomatic confusion persisted.
The fourth-quarter reporting season is ongoing and a couple of large companies reported this week, including Johnson & Johnson, United Airlines and Netflix. The world’s largest content streaming company, Netflix, delivered solid results over the last three months of 2025 with reported earnings slightly above expectations and revenue up by 18%. However, the company issued a cautious first-quarter 2026 outlook, which weighed on sentiment. Management flagged higher programme spending, uncertainty around the Warner Brothers Discovery deal and a softer margin trajectory going forward. This tempered guidance overshadowed the solid quarterly results, prompting concerns about the sustainability of growth and profitability. As a result, the stock fell in after‑hours trading despite headline strength, as investors reassessed 2026 expectations.