Weekly Buzz: New year, new earnings

Earnings season in the US kicks off this week and expectations are high for the big banks reporting first – Citigroup, Goldman Sachs, and Morgan Stanley. Investors will look to the results to set the tone, and for clues about what kind of year 2026 might shape up to be.

Why the banks set the tone

This earnings season is already unusual – analysts were raising their forecasts at the end of last year, instead of cutting them as they usually do. The US economy is holding up: the job market’s doing better than feared, and inflation has cooled slightly. Unemployment edged down to 4.4% in December, just below the 4.5% forecast, and average hourly earnings rose at a faster-than-expected 3.8% year over year. 

That said, those aren't knockout numbers, so it's a good time to check in with the banks. They sit at the center of the economy. On one hand, they finance the biggest companies; on the other, they track credit for everyday consumers. What they say about loan demand, deposits, and credit quality can cut through the noise – making their commentary especially useful as investors gauge the year ahead.

What’s the takeaway here?

Markets are pricing in a good year ahead, with growth and profits expected to strengthen on the back of AI. Investors want confirmation that that strength can spread beyond Big Tech and into other sectors – a broader, market-wide rally.

While it is worth paying attention to, the real edge for long-term investors isn't in reacting to earnings calls. Earnings seasons come and go, and so do the narratives that follow them. What matters more than any single quarter is whether you're positioned to benefit from long-term growth as a whole.

(Owning a diversified portfolio means you're not betting on any one sector to carry the year – check out General Investing if you’re looking for one that’s ready-made.)

In Other News: When the institutions face pressure

US prosecutors opened a probe into Federal Reserve (Fed) Chair Jerome Powell this week, tied to a US$2.5 billion renovation of the central bank's headquarters. Powell says the investigation is political payback for refusing to cut interest rates faster, while the White House denies any connection to rate policy.

Markets responded predictably: gold prices rose back above US$4,600 an ounce, while the US dollar slipped. Investor confidence in institutions matters. When that confidence wavers, investors move toward safe-haven assets like gold.

Political pressure on central banks is not new. The Fed has faced public criticism before, and these periods have created short-term market swings. Long-term returns, however, tend to track earnings growth, productivity, and inflation trends, not political noise.

For investors with a long time horizon, a familiar principle holds: headlines are constant, but the economic fundamentals are what drive returns over time. The market remains anchored to interest rates, growth expectations, and multi-year, structural themes like AI. Regular investing helps you stay focused on these fundamentals, smoothing out your entry points and removing the noise from your strategy.

These articles were written in collaboration with Finimize.

Simply Finance: Earnings season

Earnings season is the few weeks each quarter when listed companies publish their financial results. They report how much money they made, how much they spent, and whether business improved or slowed. When earnings grow across companies, it signals healthier businesses. When earnings weaken, it points to tighter conditions.