Weekly Top Ten Macro and Cross Asset Strategy - Jan 4, 2026

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. 2025: Thematic Review

Most of our major themes during 2025 proved correct and made investors money. These themes included the Hong Kong market, gold, and the dollar.
The US dollar weakened rapidly after “Liberation Day,” absorbing the selling pressure from the bear market in March/April. The US substantially underperformed its global peers during the year.
Underlying actual inflation is high and increasingly disconnected from published BLS inflation rates. This has contributed to the surge in precious metals, as real interest rates have declined rapidly.

Asia defied US tariffs to grow at a faster pace in 2025 than 2024.
But the tech-led growth spurt masks internal fault lines of sluggish domestic demand and a weakening manufacturing sector.
The growing divergence between tech‑dependent sectors and the rest of the economy will require careful policy calibration going forward, even as Chinese competition, US protectionism and geopolitical challenges persist.

We discuss the five most important factors driving the Korean stock market this year which was the best performing among all major country equity markets in the world in 2025.
These five factors included the global AI boom, wars and rumors of wars, beneficiaries of MASGA, Korea Value-Up initiatives, and reduced political uncertainties with new President elected in June 2025.
Our best bet to diversify one’s portfolio and be more cautious because staying alive will be a key in 2026 rather than FOMO, especially in 2H 2026.

Indonesia fund positioning has collapsed, with average weights and participation falling to 15-year lows; 7.2% of funds exited entirely in the past six months.
Exposure remains highly concentrated, with five stocks making up 75% of allocations—yet even these names have seen sharp declines in ownership.
The median weight sits well below the average, reflecting how a narrow group of high-conviction funds is skewing overall exposure amid a broad-based retreat.

The performance of the US economy and equities exceeded the predictions of many who feared fallout from tariffs. Highly respectable economic momentum during 2025 H2 will spill over into 2026.
US fiscal policy will be reflationary during 2026 H1, due to political considerations, courtesy of large tax refunds as well as potential tariff-related dividends being paid to households.
Fed policy will be eased during 2026 by a magnitude that may exceed current market expectations. US equities will enjoy broad-based support from reflationary policies, producing less narrow market leadership.