In the United States, markets continued to edge higher last week despite the significant geopolitical actions undertaken by the US in Venezuela. In fact, markets closed higher in Monday’s session, the first trading day since the operation to oust President Nicolás Maduro. Markets continued to advance through the week, with the S&P 500 breaking the 7,000 level for the first time in history. However, sentiment turned negative on Wednesday, driven not by geopolitical concerns but by economic factors, as jobs data reinforced the view that the labour market is beginning to weaken. While the situation in Venezuela dominated headlines, President Trump also signed an executive order last week seeking to prevent defence companies from paying dividends or conducting share buybacks until they “produce a superior product, on time and on budget”. The announcement sent shares in Lockheed Martin, Raytheon and others down by more than 4% on Wednesday afternoon, before rebounding in after-hours trading on Thursday morning after President Trump stated he wished to raise the US military budget by 50% to $1.5tn.
In corporate developments, US asset managers recorded a landmark year for mergers and acquisitions spending. Globally, M&A activity exceeded $4.5 trillion for the first time since 2021, with 68 transactions valued at more than $10 billion. Two deals stood out in particular: the acquisition of Norfolk Southern by Union Pacific in the rail sector, and the protracted Warner Bros. Discovery saga, which saw Netflix and Paramount engage in a competitive battle for the iconic studio, with Netflix winning out in the end. In healthcare, Novo Nordisk began 2026 decisively, announcing a significant price reduction for its Wegovy pill in the US. From January to April, patients can purchase the lowest dosages of the pill — 1.5mg and 4mg — for $149 per month, rising to $199 per month thereafter. Insured patients may access these dosages for as little as $25. This pricing is materially lower than both Novo Nordisk’s injectable version of Wegovy and Eli Lilly’s weight-loss drug, Zepbound, which is currently only available in injectable form. Wegovy is the first oral GLP-1 weight-loss pill approved by the FDA; however, Eli Lilly is expected to launch a pill version of Zepbound later this year at a substantially lower price than its injectable counterpart. Pricing strategy remains critical for Novo Nordisk as it seeks to keep pace with Eli Lilly, which has moved decisively ahead in the race to supply weight-loss treatments at scale. Novo Nordisk’s share price has fallen by more than 40% over the past year, while Eli Lilly’s has risen 36%, with the company becoming the first healthcare firm to surpass a $1 trillion market capitalisation in 2025. Finally, remaining within the weight-loss theme, a San Francisco–based start-up, Okava, is testing a GLP-1 drug known as exenatide for use in pets, including cats and dogs. Its initial trial, aptly named MEOW-1, marks an early step towards commercialisation. The company aims to price the treatment at up to $200 per month, as spending on household pets in the US continues to surge, with $183 billion spent on pets according to 2023 data.
For the week, the S&P 500 and NASDAQ closed higher, rising 0.97% and 1.42% respectively.
In Europe, equity markets rose to new highs in the early part of last week, brushing aside concerns over Venezuela and extending their record-breaking run. Both the Eurostoxx50 and the STOXX600 closed at record levels on Monday, supported by broad-based sector gains, with defence and basic resources stocks leading the advance. However, as the week progressed, indices began to lose momentum as geopolitical tensions overshadowed positive corporate sentiment. On the corporate front, KKR announced plans to invest $1.5 billion into its European data centre platform, reflecting a bullish outlook for growing data centre demand in Europe despite the sector’s current dominance by the US.
For the week, the Eurostoxx 50 and STOXX600 finished higher, gaining 1.62% and 1.78% respectively.
In the United Kingdom, the FTSE 100 pushed past the 10,000 mark for the second time in history last Tuesday, having already broken the threshold in the opening days of 2026. Despite its lower allocation to technology compared with its peers in Europe and the US, the index delivered stronger gains in 2025 than major benchmarks in both regions, supported by sustained demand for metals and basic resources. That trend appears set to continue, with the index advancing again last week on the back of strong performances from oil majors Shell and BP, as well as metals producers such as Fresnillo, which have benefited from a rally in precious metals.
In corporate news, Tesco and Marks & Spencer both reported positive Christmas trading updates. Tesco recorded 3.7% like-for-like sales growth over the 19 weeks to 3 January, while Marks & Spencer reported 5.6% growth over the 13 weeks to 27 December.
For the week, the FTSE 100 closed 1.43% higher.
