February 6, 2026
The first week of February 2026 marked a significant shift in global market leadership, as the “AI-at-any-price” strategy hit a wall, giving way to value-oriented sectors and commodity-driven rebounds.
Key Takeaways
- The “Great Rotation” has arrived: Investors are actively pulling capital out of high-growth U.S. technology stocks and redirecting it into “Old Economy” sectors. This is driven by a demand for tangible earnings over AI hype and is reflected in the massive 400-basis-point outperformance of value stocks over growth stocks this week.
- Monetary Divergence is creating opportunity: While the U.S. Federal Reserve faces “economic crosscurrents” (strong manufacturing vs. weak labor), Europe is moving toward a clearer easing cycle. With Eurozone inflation hitting 1.7% and the Bank of England hinting at a March cut, European equities and interest-sensitive sectors like Real Estate are becoming increasingly attractive.
- Labor markets are flashing “Caution” signs: Across North America, the data is softening. The U.S. is seeing the highest January job cuts since 2009, and Canada is experiencing a shrinking labor force despite a lower headline unemployment rate. This suggests that while stock indexes are resilient, consumer spending and the broader economy may face a “participation trap” in the coming months.
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Warren Gerow is an independent investment wealth consultant at Sightline Wealth Management.
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