The Greenland Selloff: When Tariff Theater Trumps Market Logic

The Daly Asset Management Fund is Officially Live

Daly Asset Management is officially live.

You can now invest directly in our systematic, data-driven strategies at dalyassetmanagement.com. This isn't your advisor's 60/40 portfolio. This isn't another closet index fund charging active fees. This is quantitative investing built for sophisticated, self-directed allocators who understand that alpha comes from being systematically contrarian, not chasing whatever CNBC is pumping today.

The market is rotating. Concentration is cracking. And the strategies we've deployed are built for exactly this environment.

Corporate Overview

Markets got their first real taste of Liberation Day déjà vu this week when President Trump threatened 10% tariffs on eight NATO countries over Greenland — sending the S&P 500 down 2.1% in its worst session since October.

By Wednesday, he'd walked it back, stocks rallied 1.2%, and the whole episode served as a reminder: in 2026, policy whiplash IS the policy.

At Daly Asset Management, we don't chase headlines — we follow structural shifts, systematic data, and valuation disconnects that Wall Street consistently misses.

💡 Stock of the Week: SLB (Schlumberger)

Ticker: SLB | Sector: Energy Services | Market Cap: $62B | Yield: 2.4%

Trump's Venezuelan oil infrastructure play has thrust oilfield services back into the spotlight:

• The Catalyst: After the U.S. captured Venezuelan leader Nicolás Maduro in early January, the administration announced plans to invest at least $100 billion rebuilding the country's oil capacity

• SLB's Position: As the world's largest oilfield services provider, SLB owns the data infrastructure and AI-enabled drilling tech that makes such projects viable

• Valuation Edge: Stock spiked 15% in January but Morningstar analysts rate it 10% undervalued with a 3-star rating

The Investment Case:

• Long-term contracts: Venezuela's oil fields have decayed for decades; rebuilding requires multi-year, capital-intensive contracts — SLB's bread and butter

• Competitive advantage: Unlike rivals Halliburton (5% discount) and Baker Hughes (6% discount), SLB trades at the widest valuation gap while possessing superior data analytics capabilities

• AI edge: Morningstar notes SLB's "oilfield services data becomes increasingly valuable as they figure out how to use artificial intelligence to improve oil production"

• Debt recovery: SLB is owed approximately $469 million by Venezuela for past services

Key Risks:

• Oil price volatility (WTI currently at $60)

• Execution risk on Venezuelan rebuild timelines

• Geopolitical exposure

At 10% below fair value in a sector experiencing a structural catalyst, SLB offers asymmetric upside for investors willing to stomach energy sector volatility.

📉 Market Snapshot (Week of January 16-23, 2026)

*Gold hit fresh record high of $4,966.93 on January 23

The divergence says it all: Small caps continue their historic outperformance with the Russell 2000 now up over 9% YTD — its strongest start to a year since 2008. Meanwhile, gold surged past $4,950/oz, on track for its best weekly performance since March 2020.

📊 Market Commentary

🔥 Greenland Tariff Theater Meets Reality

Tuesday's 2.1% S&P plunge was textbook Trump: threat escalation → market panic → Wednesday reversal.

What happened:

• Saturday: Trump announced 10% tariffs on Denmark, UK, Germany, France, and others over Greenland control

• Tuesday: Mag 7 each dropped 1%+, Treasury yields spiked to 4.30%, Bitcoin couldn't hold $90K

• Wednesday: Trump backed off threats citing "framework agreement" with NATO — stocks surged 1.2%

The real story? Markets increasingly treat Trump tariff threats as negotiating theater rather than economic policy, which explains why recoveries happen within 24 hours.

📈 The Great Rotation Is Real — and Accelerating

Small caps are experiencing their most dominant start to a year in over a decade.

The numbers:

• Russell 2000 outperformed S&P 500 for 12 consecutive sessions — not seen since June 2008

• Analysts project 19% earnings growth for small caps in 2026 vs. just 12% for large caps

• Fed at 3.50%-3.75% = lower borrowing costs benefit debt-heavy small caps

• Domestic-focused revenue streams less exposed to tariff volatility

This isn't a January blip — it's a multi-quarter regime shift. Regional banks and industrials are leading; the Mag 7 is officially lagging.

⚖️ Fed Independence Under Supreme Court Scrutiny

Wednesday's Supreme Court oral arguments over Trump's attempt to fire Fed Governor Lisa Cook revealed deep skepticism from the bench.

Key developments:

• Justice Kavanaugh warned allowing Trump to fire Cook "would weaken, if not shatter, the independence of the Federal Reserve"

• Trump reportedly down to four Fed Chair candidates

• Treasury Secretary Bessent hinted announcement could come "as soon as next week"

• Markets pricing in more dovish replacement for Powell

Market impact: 10-year yield already kissing 4.25%. If a dovish Chair materializes, expect bond vigilantes to test the limits.

🎬 Netflix Stumbles, Streaming M&A Heats Up

Netflix missed on Q1 guidance after reporting Q4 earnings, sending shares down 6.8%.

The drama:

• Beat on EPS (56¢ vs. 55¢ expected) but Q1 guidance disappointed

• Stock down 32% in three months

• Locked in bidding war with Paramount Skydance for Warner Bros. Discovery

• Netflix offering all-cash $82.7B bid vs. Paramount's $108.4B

Streaming consolidation is accelerating — but at what price?

🧭 Tactical Map: Where to Lean In

• Small-cap financials & industrials — Regional banks benefit from steepening yield curve; domestic manufacturers from reshoring tailwinds

• Energy services — Venezuelan infrastructure rebuild and elevated geopolitical risk premium support SLB, HAL, BKR

• Gold/silver exposure — Central bank buying + fiscal deficits + dollar weakness = structural bid

🔍 Theme to Watch: Dollar Weakness and the Gold Supercycle

Gold's ascent past $4,642/oz marks more than safe-haven jitters — it's a structural repricing.

The fundamentals:

• For the first time in decades, central bank gold reserves now exceed foreign-held U.S. Treasuries in market value (~$4 trillion each)

• Dollar down 8.8% since year-end

• Fiscal deficit trajectory suggests this isn't temporary

• HSBC forecasts gold could hit $5,000/oz in H1 2026

This isn't just a trade — it's a 10-year structural shift as the world de-dollarizes incrementally.

📅 Forward View: January 26-31, 2026

Top Market-Moving Events:

• January 28 (Wed):

  • FOMC Meeting + Powell Press Conference — markets pricing ~80% chance of pause at 3.50%-3.75%

  • Mega-cap earnings: Microsoft, Meta, Tesla, IBM

• January 27 (Tue): Consumer Confidence, New Home Sales

• January 23 (Fri): University of Michigan Consumer Sentiment (Final)

What to watch: The Fed decision will dictate February positioning. If Powell hints at March cuts, small caps extend gains. If he pushes back, expect volatility.

💬 Final Words

This week crystallized 2026's core tension: policy uncertainty colliding with genuine structural rotation. Trump's tariff theater rattled nerves, but the real story is capital fleeing overvalued tech for underpriced domestics.

At Daly Asset Management, we focus on what actually moves portfolios long-term — not 24-hour news cycles. Systematic, value-driven, no hidden fees. That's how you build wealth in volatile markets.

Disclosures: This newsletter is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always conduct your own due diligence or consult with a financial advisor before making investment decisions.