Happy Valentine’s Day! We are already two months into 2026.
The market seems not quiet. Stocks, cryptocurrencies, and gold rise and then plummet. $1 trillion has been wiped out from the US stock market today. People are apprehensive, frightened, and afraid. They want to know what comes next.
- Is the bull market over?
- Will Bitcoin recover?
- Should I buy stocks in the dip?
1. I’m Positive About the World Economy
In 2025, the US GDP growth started to show indications of revival after a year-long decline. Although the most recent GDP data is still pending, the OECD’s leading indicators (CLIs) indicate that the global economy is currently rebounding.
In January 2026, the US CLI increased from 100.42 to 100.55. Additionally, hourly salaries increased from a low of 3.62% to 3.76% in December 2025. This is good news because the US economy is mostly driven by consumption.
To be honest, the US economy performs not badly.
In addition, since 2025, the CLIs for Germany, the UK, France, Korea, and Canada have been rising. The Eurozone’s performance appeared to be even better than the US’s. China’s CLI is still declining, though.
I mean, the data shows the world’s economy is recovering. The PMIs are also good. The USD Markit PMI is 52.4, and the ZEW, an indicator of economic sentiment of Germany, has increased from 45.8 to 59.6.
I’m sure that this recovery is because of AI. The investments in AI computing power increase aggregate social demand, and this is why companies poured a lot of money into their CAPEX, driving the prosperity of other industries.
2. Inflation is Under Control
US inflation once reached 9% due to the pandemic’s enormous boost. The Fed has since concentrated on reducing inflation without causing an economic meltdown. Thankfully, they have had a lot of success in the last 12 months.
It is now below 3%.
But this is the problem.
Good news is now bad news because the Fed will not lower rates, since the economy is performing better than expected. Liquidity is the only thing the market cares about right now. They don’t care about fundamentals at all.
The rate will be held in March.
The premium that investors place on liquidity is excessive. Even a minor disruption can cause asset prices to drop precipitously. The GDP and employment are growing, but they are “bad news” because the interest rate cuts by the Fed are improbable.
3. The Opportunity for 2026
According to the Merrill Lynch Investment Clock, the best investment during the recovery cycle is stocks. Tighter liquidity may cause the Nasdaq to decline temporarily, but as the economy improves, excellent firms will continue to expand. Growing earnings will push their stock price higher, but investors will be more patient right now.