A turbulent start to the year: Stock markets rise amid Greenland’s polar cold and the killings in Iran

Greenland is geopolitically important due to its strategic location, abundant natural resources, and proximity to the US. Too tempting for Trump’s whims.

Greenland is geopolitically important due to its strategic location , abundant natural resources, and proximity to the US. Too tempting for Trump’s whims.

The ice breaks and Trump arrives

The island boasts significant reserves of minerals essential for industry and fossil fuels— oil and natural gas —including rare earth elements crucial for companies in the defense and technology sectors . The Arctic ice cap has partially melted, making these resources more accessible and opening shorter shipping routes between North America, Europe, and Asia. Hence Trump’s eagerness to control Greenland and the risk that the situation could escalate into a new trade conflict , involving tariffs, between Europe and the US, as well as a potential NATO crisis .

The geopolitical risk premium for oil decreases.

Despite the tension inherent in the described situation, the oil risk premium has barely risen, partly due to President Trump’s recent downplaying of the possibility of war with Iran . The deaths from the last American deployments in the region are still fresh in people’s minds, and Trump doesn’t want to be the one to bring them back. In fact, he stated that he believed the killings in Iran had stopped, after having previously declared that he would consider «very strong measures» if protesters were killed. It seems that thousands of Iranians have died due to the repression of the Iranian theocratic regime, but, in everything related to the Arab world, everyone sees what suits their own agenda.

Both European Brent crude and US WTI crude have not experienced significant increases since the beginning of the year, remaining in the $60-$70 range , which is a positive sign for controlling inflation. Gold and silver , on the other hand, whether due to their safe-haven status or the continuation of last year’s upward trend, are rising sharply in 2026, especially silver (+25%!).

Calm and rotation in the stock markets, for now

Stock market rotation is dominating the markets at the start of this year, with a relative calm in the markets overall compared to what might be expected given the described scenario. Narrow credit spreads and the low cost of capital due to reduced interest rates are supporting risk assets, and profitability is currently prevailing over political noise and concerns about excessive valuations. The stock market rally is rotating among sectors, with gains in US, European, Japanese, and especially emerging market equities. Small-cap companies are leading the trend , as investors favor cyclical stocks.

And the Spanish one continues to rise.

I believe the strong start to the year for many Spanish stocks will continue. Our stock market could extend last year’s upward momentum , although with less force due to the price levels reached by many companies. Banks, with less upside after the significant gains accumulated, remain in a favorable position due, among other reasons, to the positive sentiment in the real estate sector and the low level of non-performing loans. They will continue to be key players, along with quality companies such as Inditex, utilities , and the Ibex REITs (Merlin, Colonial). The differential growth of our economy compared to other European economies continues to attract capital flows from international investors, and this, naturally, supports the upward trend.

P.S. A word of realism for believers: it seems President Sánchez wants to create a sovereign wealth fund, like those in Norway and some Arab countries. I don’t think we’ll ever know what money he intends to use, as these types of investment vehicles are usually funded with budget surpluses, which are precisely what our economy lacks, burdened as it is by public debt exceeding 100% of its GDP . Furthermore, this approach could backfire, costing hum even more votes —the very votes he’s trying to win with this proposal. Playing with public funds when our country has neither the means nor the means to use them is not a sound plan for a political program that will try, by any means necessary, to ensure the political survival of its party.