Australian and global equities have demonstrated surprising resilience despite a series of significant political and corporate shocks at the beginning of 2026, according to Morningstar equity market strategist Lochlan Halloway. Investors appear to have largely dismissed events such as the arrest of Venezuela’s president, US pressure on the Federal Reserve, and two major Australian mergers and acquisitions (M&A) proposals.
Halloway noted the opening weeks of the year have been unusually eventful, compressing months’ worth of potential market-moving events into a short period. He highlighted the muted market reactions following Nicolás Maduro’s ouster, with minimal impact on oil prices and US equity benchmarks. Similarly, Halloway pointed to the Department of Justice’s subpoenas against Federal Reserve chair Jerome Powell, which also failed to significantly disrupt market sentiment. Equities experienced an initial dip but quickly recovered, with markets largely returning to normal.
Domestically, Halloway commented on the Rio-Glencore discussions, suggesting they are strategically driven by Rio’s ambition to diversify into copper, influenced by easing ESG resistance to coal assets under the Trump administration. “Trump is clearly influencing decisions in the boardroom, and the two marquee M&A proposals of the new year speak to that. At the macro level, investors appear comfortable with this new world order, demanding little in the way of additional risk premia,” Halloway said.
Halloway advises maintaining some dry powder and a list of high-quality stocks to capitalize on opportunities created by potential disruptions in the market. He cautioned that the Liberation Day selloff indicates the market’s potential reaction when Trump’s influence is taken seriously, and with a new Fed Chair arriving in May and US midterms in November, further unexpected events are anticipated throughout the year.
