Market momentum is broadening: Insights from Jurrien Timmer - January 19, 2026
Fidelity’s Director of Global Macro, Jurrien Timmer, shared his insights on current market dynamics, highlighting broadening participation, resilient earnings trends and the importance of diversified asset allocation in an environment shaped by geopolitical uncertainty.
Here are some of the key points from his commentary.
Broadening market momentum despite heavy headlines
Jurrien noted that although geopolitical headlines remain elevated, the underlying market picture shows encouraging signs of balance and resilience. The dominant U.S. hyperscalers have paused after a strong run, creating room for other sectors and market caps to gain traction. The S&P 500 Equal Weighted Index has begun to break out while the market‑cap‑weighted index has held steady and market breadth has strengthened as the percentage of stocks above their 50‑day moving average rose from 32% in November to 73%.
Valuations, earnings and what the market is pricing in
Jurrien emphasized that earnings remain the primary driver of market performance. Year‑over‑year, S&P 500 earnings have grown 12%, while the price‑to‑earnings ratio has increased 2% and dividends add roughly 1.4%. The market is implicitly pricing in a roughly 14% compound annual growth rate in earnings over the next several years, compared to a long‑term average closer to 7%. Within Jurrien’s discounted cash‑flow framework, this corresponds to an equity risk premium near 4.3%, which is slightly below long‑term norms but not extreme.
Earnings trends outside the U.S. show areas of improvement
Forward earnings estimates have risen 14% in the U.S., 23% in emerging markets and 17% across developed international markets, with the MSCI EAFE Index outperforming the S&P 500 on both cap‑weighted and equal‑weighted bases. Approximately 75% of global stocks are in uptrends, pointing to broadening participation across regions.
A complex geopolitical landscape and the role of commodities
Jurrien discussed the mosaic of cross‑currents influencing markets, including tariff impacts, shifting supply chains and real‑time inflation readings such as the Truflation Index, recently near 1.7%. Declining oil prices have helped offset tariff pressures and some of last year’s concerns did not materialize as expected.
Commodities are also gaining attention as elements of deglobalization make certain resources less fungible. Jurrien highlighted improving technical conditions in gold, copper and the broader commodity complex, noting that commodities can serve as a diversifier given their low correlation to equities and bonds. Global money supply growth (currently near an 11.4% annual rate) also supports gold’s role as a hedge against monetary inflation.
Implications for asset allocation
Jurrien observed that bonds have regained their negative correlation to equities over the past year, re‑establishing their role as portfolio anchors. Equities remain central to long‑term allocation and many asset‑allocation teams favour broad global exposure while maintaining a relative underweight to the U.S. due to its higher implied earnings expectations.
Jurrien also noted that while Bitcoin may take a “year off,” its momentum curves suggest it could begin to re‑align with other risk assets. A diversified mix that includes equities, bonds, commodities, gold and alternatives can help investors navigate uncertainty without relying on any single driver of returns.
Conclusion: Viewing the market through a broader lens
Jurrien’s latest review points to an environment marked by broadening participation, improving global earnings trends and a complex but navigable set of macro forces.
