At the table or on the menu, Weekly News Flash

The world’s political and business elite gathered in Davos, Switzerland, this week, raising questions about who sets the rules and who is forced to live with them during this time of geopolitical realignment. US President Donald Trump made himself the centre of attention before the event even started with a renewed demand that the US must own the Arctic island of Greenland.

The Trump administration has fixated on Greenland in recent months, arguing that the US needs the territory for national security in the face of Chinese and Russian threats. Greenland’s strategic value is growing as receding ice opens new Arctic shipping routes as well as potential access to critical rare earth minerals. Trump claims that Greenland is also an important site for the US’s proposed “golden dome” air defence system.

The US President threatened new tariffs against European countries that resisted the claim on Greenland, a self-governing, autonomous territory within the Kingdom of Denmark. The insistence that the US must own Greenland has bewildered European countries, since America and the North Atlantic Treaty Organization (NATO) already have extensive military access to the island through long-standing agreements with Denmark.

As outlandish as the idea of the US seizing Greenland by military force may once have seemed, many players saw the threat as part of a pattern of coercive statecraft. The US’s recent incursion into Venezuela to capture President Nicolás Maduro and his wife, Cilia Flores, for example, suggests that Trump is willing to shatter norms in defending America’s interests in the Western Hemisphere in the face of China’s rising influence.

There was a significant sell-off in risk assets on Tuesday, as investors contemplated fractures in NATO and another transatlantic trade war. US equities suffered their worst session since October, with the Dow Jones Industrial Average dropping 1.8%, the S&P 500 down 2%, and the Nasdaq Composite falling 2.4%. Gold spiked, reaching an all-time high of $4,883 on Wednesday, before advancing above $4,950 on Friday morning. US Treasuries and the US dollar also came under pressure.

But by the end of Wednesday, the tone had shifted. Trump abandoned his tariff threats and claimed a “framework agreement” had been reached. Details were not made public. There are conflicting reports about what the framework entails. However, markets took a more conciliatory tone from Trump as a signal that the immediate risk of escalation had passed. US and European equities bounced back on Thursday.

The episode is part of a pattern of hard-charging diplomacy from the Trump administration. As we saw with his “Liberation Day” tariff threats in April last year, Trump’s art of the deal is characterised by making maximalist demands. These extreme initial positions are designed to dominate counterparties and force a better deal. Trump tends to partially retreat when external forces push back on his ultimatums.

Most US presidents historically have had their excesses curbed by Congress, the courts, and voter polling data. In Trump’s case, however, these checks and balances have proven less effective. Given the relative weakness of Trump’s political opposition in the US and his hold on the Republican party, the bond and stock markets are the forces that most often curtail his excesses.

Trump’s belligerent Davos address, in which he berated many world leaders, is evidence of his willingness to alienate allies. Leaders worldwide are focused on managing his mercurial behaviour while accelerating efforts to diversify economic and security ties. As such, one of the major themes to emerge from Davos is how contestation between the US and China will continue to reshape the world in the years to come.

It is clear that we have entered a particularly messy time in geopolitical history. The US remains the world’s most powerful country, issuing the reserve currency, fielding the largest and mightiest military, and acting as the consumer of last resort. Even so, it cannot win every fight that Trump picks. Serious ruptures between the US and China or the EU could have devastating effects on the world economy if tensions boil over into prolonged disputes.

Indeed, China last year used its dominance in rare earth metals to force the US to back down from a trade war. The European Parliament decided to freeze a ratification vote on a US/EU trade in response to Trump’s threats to seize Greenland, then unfroze it when he de-escalated. The EU even floated the idea of using its “trade bazooka” anti-coercion measures in response to US pressure around Greenland. This would be unprecedented and deeply harmful to the world economy.

In a notable speech, Canada’s Prime Minister, Mark Carney, warned that the world is entering a period of rupture in which the rules-based international order can no longer be relied upon. He argued that we are moving toward a new order in which smaller and mid-sized countries will need to band together to avoid economic coercion by larger states.

Carney’s message resonated strongly in the wake of last year’s US-instigated trade wars and Trump’s apparent indifference to the norms of the post-war international order. New alliances are being forged, and existing ones are being re-examined. Many countries are realigning their economic and political relationships to reduce vulnerability. And nations across the board are looking at new tools to manage their rivals and even erstwhile allies.

For investors, this all has implications that extend beyond this week’s headlines. Trends we discussed throughout 2025 – including a weakening dollar and partial investment diversification from the US and developed markets toward other regions – look set to continue as the idea of unchallenged US exceptionalism starts to falter.

“Our view is the middle powers must act together because if we’re not at the table, we’re on the menu.”

– Canada’s Prime Minister, Mark Carney

“The old order is not coming back. We should not mourn it. Nostalgia is not a strategy.”

– Canada’s Prime Minister, Mark Carney

Global News

Trump dominated this week’s World Economic Forum (WEF) in Davos with a rambling speech in which he renewed his push to acquire Greenland, repeated his false claim that the 2020 US election was “rigged,” and attacked renewable energy as a “green scam,” promoting US oil and gas deregulation as vital for economic survival. His remarks set the tone for the forum and raised concerns about a shift in the global order, with Carney warning of a potential “rupture” in the US-led system, French President Emmanuel Macron calling Trump’s Greenland tariff threats “fundamentally unacceptable,” European Commission President Ursula von der Leyen urging greater EU strategic independence, and China’s Vice Premier He Lifeng portraying China’s rise as an opportunity for shared growth.
However, investors were focused less on Trump’s rhetoric and more on which comments might translate into actual policy action. UBS notes that while headlines have warned of a potential “sell US” trade, this is misleading. History shows that fiscal crises are not triggered by the outright selling of debt, but by a drying up of funding inflows, as seen during the UK’s Truss episode and Greece’s debt crisis. The greater risk, therefore, lies in reduced foreign investment rather than mass selling of US assets.
Trump said on Wednesday that he would hold off on imposing planned tariffs on European countries that opposed his push to gain influence over Greenland, citing what he described as a “framework for a future deal” reached with NATO Secretary-General Mark Rutte, covering the Arctic island and broader regional cooperation. The announcement, made during WEF, marked a sharp reversal from earlier threats of punitive tariffs that were due to take effect next month, with rates set to rise as high as 25% later in 2026, and helped ease tensions that had unsettled markets and strained transatlantic relations, even though no concrete details of the framework were disclosed.
The EU is moving to unfreeze and ratify its stalled trade agreement with the US after Trump backed away from earlier threats to impose tariffs over Greenland, easing tensions that had derailed the deal. EU lawmakers are now preparing for a parliamentary vote, the final step toward ratification, following Trump’s reference to a new “framework” agreement with NATO allies that signalled de-escalation. The pact had been frozen amid concerns about US coercion and doubts over Washington’s reliability, but officials now view renewed engagement as strategically important to stabilise transatlantic relations, strengthen supply chains, and counter rising global competition, particularly from China, amid heightened geopolitical uncertainty.
Gold’s January rally eased modestly after Trump backed away from threatened tariffs tied to the Greenland dispute. Yet bullion’s subsequent price surge to a record $4,960 an ounce, still underscores its enduring appeal as a store of value and hedge against uncertainty, delivering strong inflation-adjusted returns over the long-term as geopolitical tensions, policy risk, and safe-haven demand elevate precious-metal flows. (Dynasty introduced a global gold miner’s ETF into our house-view equity portfolios in the fourth quarter of 2025, while our local Preserver Fund acquired a strategic holding in the precious metal through the purchase of a gold ETF in 2020).
US Treasury Secretary Scott Bessent said on Tuesday, on the sidelines of the WEF, that Trump could announce his pick for Fed Chairman as early as next week, with four candidates under consideration. BlackRock’s Chief Investment Officer, Rick Rieder, has gained momentum as a potentially easier-to-confirm nominee amid heightened Senate scrutiny on the process. Former frontrunner Kevin Hassett has lost ground after Trump expressed reluctance to nominate him, citing concerns about losing a key economic adviser. Investors are watching to see how Jerome Powell’s successor will manage the Fed’s $6.6 trillion balance sheet and its approach to liquidity in financial markets.
Most economists expect the Fed to keep interest rates unchanged this quarter and possibly until Powell’s tenure ends in May, reversing last month’s expectation of at least one cut by March. Inflation remains above the Fed’s 2% target, limiting near-term reductions, though most economists polled by Reuters between 16 and 21 January anticipate at least two cuts later this year. The poll median predicts GDP at 2.3% this year, with growth averaging 2% through 2028.
The International Monetary Fund (IMF) raised its 2026 global growth forecast to 3.3% in an updated World Economic Outlook released on Monday, citing easing US tariff pressures and continued investment in AI. Global growth is also expected to have reached 3.3% in 2025 before easing to 3.2% in 2027. The IMF said economies have adapted by rerouting supply chains and signing trade deals, while strong AI investment lifted its 2026 US growth forecast to 2.4%.
China’s economy met the government’s 5% target in 2025 as the country relied on exports to counter weak domestic demand, data published on Monday showed. The strategy delivered a record trade surplus, 20% higher than in 2024, as shipments to markets outside the US increased. Yet industrial activity outpaces consumer spending, and property investment continues to decline. China is expected to target growth of about 5% again this year, but a Reuters poll forecasts a slowdown to 4.5% in 2026.
Selling in Japan’s $7.6 trillion bond market intensified on Tuesday, pushing some government bond yields to record highs after weak demand at a 20-year debt auction amid mounting concern over PM Sanae Takaichi’s fiscal plans. The selloff forced hedge funds, insurers, and corporate investors to unwind positions. Takaichi will call a national election on 8 February seeking votes for tax cuts, increased spending, and a new security strategy that is expected to accelerate a defence build-up. Ahead of what will be her first electoral test since becoming Japan’s first PM in October, Takaichi plans to dissolve Parliament on Friday ahead of the snap vote for all 465 seats in the lower house of parliament.
Apple plans to turn Siri into its first AI chatbot later this year, code-named Campos, embedding it across iPhone, iPad, and Mac systems, according to sources. It will offer chat-like conversational abilities, surpassing current Siri and earlier promised updates. The move is central to Apple’s push into the GenAI market, where it has lagged peers. Shares rose 1.7% on the news on Wednesday, with Alphabet, supplying the underlying tech, up 2.6%.
Netflix moved to an all-cash offer of $82.7 billion, or $27.75 a share, for Warner Bros Discovery’s studio and streaming assets on Tuesday as it aims to block Paramount’s rival bid. The offer has unanimous support from the Warner Bros board, which plans a special investor meeting by April. Netflix said the cash deal allows an expedited shareholder vote and greater financial certainty.
De Beers cut its official diamond prices on Monday for the first time in over a year, ending efforts to support the market amid slumping demand. The industry has been hit by falling Chinese luxury spending, rising popularity of synthetic stones, and 50% US tariffs on India, the world’s largest diamond exporter, although it has shown signs of stabilising. The cuts applied to rough diamonds larger than three-quarters of a carat, according to sources.
As at Thursday’s close the S&P 500 was 0.4% down for the week.

Local News

The rand held steady near its strongest level since August 2022 after Trump backed away from tariff threats and ruled out using force over Greenland, easing global risk aversion. The currency now trades around R16.14/$, up about 2.3% so far in 2026, as improved sentiment lifted emerging-market assets.
South Africa has been leveraging its attendance at WEF to showcase its economic stability, progress on reforms, and investment readiness. The delegation, led by Finance Minister Enoch Godongwana, is highlighting stabilised electricity, removal from the Financial Action Task Force grey list, a sovereign credit upgrade, reforms in energy, logistics, water, digital communications, and small business support. Engagement aims to position South Africa as a credible investment destination.
Godongwana says South Africa’s exclusion from the 2026 G20 summit in the US is a “temporary setback” and expects participation to resume under the UK’s 2027 presidency. He told journalists at WEF yesterday that South Africa has “taken leave” from G20 engagements this year because the US has not accredited its representatives.
South African Reserve Bank Governor Lesetja Kganyago on Wednesday signalled that the prime lending rate gap, currently 350bps above the repo rate at 10.25%, could be abolished. Speaking on the sidelines of WEF, he said the move would increase transparency for consumers. The gap has been fixed since 2001. Four of five economists surveyed by Bloomberg do not anticipate a rate cut next week.
South Africa’s slow economic recovery is expected to continue through 2026, with growth forecast at 1.4%, rising to 1.5% in 2027, according to the IMF’s World Economic Outlook on Monday. The pace remains below the sub-Saharan average and insufficient to meaningfully reduce unemployment, poverty, or inequality. The IMF notes vulnerability to global shocks, policy uncertainty, and structural constraints, though easing inflation, lower energy prices, and accommodative financial conditions provide some relief. The World Bank also raised its 2026 growth projection to 1.4% last week.
South Africa’s six largest banks continue to dominate the industry, holding about 93% of total banking assets, according to data from the South African Reserve Bank. Standard Bank leads with roughly a quarter of all assets, followed by FirstRand, Absa, and Nedbank. Smaller players, Investec and Capitec, make up most of the rest. Despite challenger digital banks circling, incumbents are defending their market share and increasingly targeting small-business lending.
Capitec became the fastest local company to surpass a R500 billion market valuation, reaching the milestone last Friday, closing in on peer FirstRand’s R513 billion valuation on the JSE. The surge reflects sharp share price growth since October and gives new CEO Graham Lee a strong start after stepping into the role last July. Capitec’s client base has expanded significantly since it listed, helping it outpace many established lenders.
Business Leadership South Africa said on Monday that the planned closure of British American Tobacco’s only local cigarette factory in Heidelberg highlights a deepening manufacturing crisis as illicit trade and weak enforcement erode the legal industry. The plant has been operating at about 35% capacity and will cut roughly 230 direct jobs, which could affect up to 35,000 positions across farming, logistics, distribution, and retail.
Coronation’s assets under management jumped to nearly R800 billion in 2025, 16% higher year-on-year, as the equities rally boosted performance, despite the firm’s cautious stance on gold stocks trading at multi-year highs. The Cape Town-based asset manager maintains meaningful exposure to both offshore and domestic equities.
As at the time of writing, the rand was 1,7% stronger against the dollar, and the ALSI was 1.1% up for the week.