The Davy Digest - 23rd February 2026

Volatility persisted in parts of the market last week as investors mulled over the threat posed by artificial intelligence to software businesses and asset managers. On Friday, the US Supreme Court struck down the use of the International Emergency Economic Powers Act (IEEPA) to impose Trump’s Liberation Day tariffs. Despite this, the IEEPA tariffs were swiftly replaced with a new 10% blanket tariff, which was subsequently increased to 15% over the weekend. US gross domestic product figures were released for the fourth quarter of 2025, showing that growth slowed to 1.4% during the period. This marked a decline from the previous quarter’s 4.4% reading, largely driven by lower government spending and a moderation in consumption. The minutes from the Fed’s January meeting were also released, noting that downside risks to employment have subsided while upside risks to inflation persist.

Last week's highlights

	US Core PCE Price Index (20/02) – Accelerated to 3.0% YoY, above expectations US Q4 GDP (20/02) – GDP QoQ growth slowed to 1.4%, well below expectations
	German January Inflation Final Estimate (17/02) – Remained at 2.1% YoY, as expected
	UK Inflation (18/02) – Slowed to 3.0% YoY, in line with expectations
	Chinese New Year (17/02) New Zealand Central Bank Meeting (18/02) – Kept rates unchanged, as expected

In Europe, the main headlines centred on rumours that European Central Bank President Christine Lagarde would step down before the end of her term in October 2027. Meanwhile, in the United Kingdom, inflation slowed to 3.0%.

This week, the Conference Board will release updates on its closely-watched consumer sentiment surveys in the US. In Europe, Ifo surveys on business activity will be released in Germany along with the GfK consumer confidence survey in the UK. In Japan, the February print for Tokyo inflation will be published along with an industrial production reading.

What's on the radar

	Conference Board Consumer Confidence (20/02)
	Germany IFO Survey (23/02) Eurozone January Inflation Final Estimate (25/02)
	GfK Consumer Confidence (27/02)
	Tokyo February Inflation (26/02) Japan Industrial Production (26/02)

Chart of the moment - Kung Hei Fat Choi

Source: Bloomberg, February 2026. Average returns calculated in USD using S&P 500 total return since 1930.

• Last Tuesday marked the start of Lunar New Year and the beginning of the Year of the Fire Horse.
• The Chinese New Year animals follow a 12-year cycle and, historically, the Year of the Horse has produced the weakest equity returns.
• The Horse is the only New Year animal to have averaged a negative return, while the Year of the Rat has typically been the strongest.