by Ivan Martchev
January 21, 2026
Looking at the raw numbers, the S&P 500 Index was marginally down last week (-0.38%), but if you look at the same index with the components weighted equally, not weighed by market-cap, the S&P rose by 0.78%, so the average stock in the S&P 500 Index (Equal Weight) was up while the index itself was marginally down, because the same trends we observed in the first week of 2026 continued last week.

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The differential between the S&P 500 Equal Weight Index and the S&P 500 has been gargantuan in the last two-weeks. I certainly do not believe this rotation will continue at the same rate, but it is likely to happen in fits and starts throughout the year. While value and small-caps can out-perform the technology-sector, I do not believe it is possible for the technology-sector to go down while value and small-caps head higher.
The technology sector going down hard means only one thing – the whole market gets pulled lower, simply due to the heavy weighting of the technology-sector in the stock market, which is by far the largest, pushing 40%, if you include some major technology-stocks being categorized differently (like electric-cars).

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The more extreme version of this rotation is represented by the Russell 2000 Index, the first index one thinks of when discussing small-caps. Russell had another solid up week (2.1%). This index is slated to have a great year, in which the faster GDP growth targeted by the Trump administration is likely to be a big support. If we get the seemingly contradictory environment of faster GDP growth and lower interest rates, I would not be surprised to see the Russell 2000 surge 50% in 2026. The index has seen a massive multi-year under-performance before, and the environment is ripe for such a move once again.
The whole index is a tad over $3-trillion in market-cap – a rounding error when it comes to the economy. It is smaller in value than several individual mega-caps in the Magnificent 7, and when it comes to stock picking, it is a problematic index. Small-cap stocks with great but under-followed fundamentals can literally stay flat for six-months and then deliver an explosive move, and vice-versa. Small-cap portfolios are notoriously less correlated to the small-cap index than large-cap portfolios, so if you want to play the small-cap market, you may be better off with index funds and broad ETFs on the index, in my view.
Greenland and Iran Are Becoming Potential Problems
I am sure they are celebrating in Moscow. The Russians would love to see nothing more than the U.S. getting mired in a full-scale collision with NATO countries over Greenland, which is a part of the Kingdom of Denmark and does not want to be annexed. The Trump administration has threatened tariffs at a time when the Supreme Court is considering the legality of expeditious tariffs in the first place, which would be a problem for the stock market if it turns out the Supreme Court does not agree with the administration.
The situation has not yet spiraled out of control, but it certainly has the potential to do so. I did not think Greenland would be a problem for the stock market at the start of the year and surely it is becoming front news. There is no point speculating how bad it may get other than to suspect the worse the confrontation gets with the Europeans spilling over into tariffs and the like, the more likely it is to pressure stocks.
Then we have Iran. I agree the Iranians would be better off with a secular government, but how does one institute regime change in Iran? Israel wanted to assassinate the Supreme Leader in their military conflict with Iran last summer and the Trump administration stopped them, but I am not sure what assassination accomplishes. It would be very difficult to institute regime change in Iran without boots on the ground, as impressive as the same kind of maneuver seems to be working in Venezuela. In other words, I do not believe the Venezuelan maneuver works with Iran as it has to do with religion, not the flow of drugs.
Both of these geopolitical situations can pressure the stock market at any time, as I would not describe these situations as stable or resolved. It is something to think about as January is starting on the right-foot.
All content above represents the opinion of Ivan Martchev of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Is Another Regime Change Coming Soon – This Time in Iran?
Income Mail by Bryan Perry
Kevin Warsh Has the “Chops” To Be Our Next Fed Chair
Growth Mail by Gary Alexander
Trump 2.1 Shocks the Pessimistic Pundits
Global Mail by Ivan Martchev
The Great Rotation Continues
Sector Spotlight by Jason Bodner
The Market Surge May Be Signaling a Coming Explosion in Growth
View Full Archive
Read Past Issues Here

Ivan Martchev
INVESTMENT STRATEGIST
Ivan Martchev is an investment strategist with Navellier. Previously, Ivan served as editorial director at InvestorPlace Media. Ivan was editor of Louis Rukeyser’s Mutual Funds and associate editor of Personal Finance. Ivan is also co-author of The Silk Road to Riches (Financial Times Press). The book provided analysis of geopolitical issues and investment strategy in natural resources and emerging markets with an emphasis on Asia. The book also correctly predicted the collapse in the U.S. real estate market, the rise of precious metals, and the resulting increased investor interest in emerging markets. Ivan’s commentaries have been published by MSNBC, The Motley Fool, MarketWatch, and others. All content of “Global Mail” represents the opinion of Ivan Martchev
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