by Louis Navellier
January 27, 2026
The World Economic Forum met in Davos last week, with Blackrock’s Larry Fink serving as interim co-chair. Since Blackrock has done an about face on ESG investing and other trendy themes, previously pushed at Davos, it will be interesting to see if he receives any sustained criticism from the global elite.
President Trump addressed the Davos crowd on Wednesday, bragging about our U.S. economic growth leading the world, boosting the global economy. He also talked about NATO, Greenland and striving to end the Ukraine/Russia war. I also noted President Trump said the stock market would double after the correction on Tuesday (in the wake of the Greenland gossip). Trump told European leaders the U.S. can best protect Greenland and called for “immediate negotiations.” By contrast, California Governor Gavin Newsom told European leaders President Trump is playing them for fools, calling Trump a T-Rex.
In a Financial Times opinion piece, Commerce Secretary Howard Lutnick said the Trump administration was going to Davos for one simple reason: “We’re not going to Davos to uphold the status quo. We’re going to confront it head-on.” Essentially, Lutnick said outsourcing jobs to the rest of the world weakened America, “crushed American workers and ripped apart most of the rest of the world as well.”
Lutnick added, “We are at Davos to make one thing crystal clear: With President Trump, capitalism has a new sheriff in town.” Furthermore, Lutnick said, “We are at Davos to herald a better way – which America is successfully demonstrating. By rejecting one-size-fits-all globalism and embracing strength, we’ve demonstrated prosperity starts at home, and there no reason other countries cannot do the same.”
During his speech at Davos, Commerce Secretary Lutnick was heckled by former Vice President Al Gore. In a statement, the Commerce Department said, “Only one person booed, Al Gore.” Gore said, “I sat and listened to his remarks. I didn’t interrupt him in any way. It’s no secret I think this administration’s energy policy is insane. At the end of his speech, I reacted with how I felt, and so did several others.” (One “other,” ECB President Christine Lagarde, also walked out of a dinner when Lutnick was talking).
Turning to Greenland, Italy’s Prime Minister Giorgia Meloni offered to mediate negotiations, but after meeting with NATO allies in Davos, Vice President J.D. Vance announced he will head the Greenland negotiations. In the meantime, President Trump belittled French President Emmanuel Macron in his Davos speech and leaked his personal texts to embarrass him about how France mismanaged Syria. Obviously, President Trump acts like a bull in a China shop to shock our European allies into action.
President Trump has said he wants to buy Greenland from Denmark. He threatened 10% tariffs, effective February 1st, on countries opposing his Greenland acquisition, which included Britain, Denmark, France, Germany, the Netherlands, Norway, Sweden and Finland. He also threatened to raise this new tariff to 25% as of June 1st. On Truth Social, President Trump said, “We have subsidized Denmark, and all the countries of the European Union, and others, for many years by not charging then tariffs, or any other forms of renumeration.” He concluded: “Now, after centuries, it is time for Denmark to give back – World Peace is at stake!” But after meeting with NATO allies in Davos, he dropped these tariff threats.
Treasury Secretary Scott Bessent echoed President Donald Trump’s message to our European allies, saying the U.S. won’t back down on Greenland, as the continent is too weak to ensure its security. Bessent dismissed EU threats (and tariff threats) by telling NBC News President Trump is using strategic leverage to get what he wants. Specifically, on Meet the Press, Bessent said, “First of all, the trade deal hasn’t been finalized, and an emergency action can be very different from another trade deal.”
Meanwhile, the situation in Iran remains horrific. The Wall Street Journal said pro-government militias are patrolling Iranian streets on motorbikes, shouting “Don’t come out! We’ll shoot you!” Asghar Jahangiri, spokesperson for Iran’s judiciary, said Iran had arrested individuals connected to Israel’s Mossad intelligence services, saying they were involved in the protests. Armed security forces control several cities across Iran, imposing what some Iranians describe as martial law. Iran’s Supreme Leader, Ayatollah Ali Khamenei, blamed President Trump for protester deaths, saying on X, “We find the U.S. President guilty due to the casualties, damages and slander he inflicted upon the Iranian nation.” In a Politico interview, Trump called Ayatollah Khamenei a “sick man” and called for new leadership in Iran.
The head of Mossad was recently in Washington DC, sparking rumors of a military strike in the works, especially since Iran threatened U.S. bases in the Middle East. So, even though crude oil prices have settled down, sanctions remain, and military strikes against Iranian security forces remain possible. Whatever President Trump intends to do, it may be quick and decisive, since speed is his trademark.
On home soil, it seems President Trump is also on the warpath, as he may use the Insurrection Act to dispatch 1,500 U.S. military troops to Minnesota. According to NewsNation, a Navy intelligence officer assigned to track terrorist financing says he documented hundreds of millions of dollars flowing from Minnesota day care fraud schemers directly to the Al-Shabaab terror networks in Somalia as early as 2016, nearly a decade before federal authorities began widespread prosecutions. Obviously, this is an incredible claim, but here is a link to the NewsNation report and the Navy intel officer’s comments (https://www.youtube.com/watch?v=taNtw6BI_G0).
In the meantime, the bond vigilantes have taken recent diplomatic chaos as an excuse to cause global bond yields to rise. Japan, Britain and France remain the primary target of the bond vigilantes, since their demographic decline (with fewer households) continues to impede their ability to pay the interest on their debt. U.S. Treasury bond yields have also risen, due to: (1) higher real interest rates, (2) strong GDP growth, and (3) better demographics compared to the rest of the world, so I expect the U.S. dollar will strengthen soon, and the 10-year Treasury bond yield will decline to 3.5% (down from almost 4.3% recently), especially if the rest of the world realizes President Trump is serious about his global ambitions.
Most Trends and Indicators Point to a Year of Exceptional (5%+) GDP Growth
President Trump will be nominating his new pick for Fed Chairman fairly soon, maybe this week, and since Senate confirmation is required, I suspect there will be a big debate about inflation, even as the threat of deflation is growing, due to falling rental and home prices, low crude oil prices and the deflation imported from China and other weak economies. I see a serious deflation risk brewing, which would require the Fed to slash key interest rates by at least 1%. Furthermore, a cap on consumer credit cards President Trump proposed will also likely be debated during the new Fed Chairman’s Senate hearings.
Between Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, President Trump and his new Fed Chair nominee comprises an impressive quartet of economic cheerleaders this year. As November’s mid-term elections approach, President Trump is expected to tour America to brag about his economic accomplishments, plus his vision for even more sustainable growth in the upcoming months.
This kind of optimism for the future can be addictive, and it will be interesting to see how well the Trump administration can sell their economic agenda. Right now, with President Trump’s call for a cap on credit card interest, plus lower interest rates, I suspect he will find few people opposing him, even though JPMorgan CEO Jamie Dimon was very critical of any cap on credit card interest rates. Obviously, President Trump is working hard to win the November mid-term elections for the Republican Congress.
In summary, there is nothing to be afraid of, except perhaps a deflationary spiral like the one plaguing China, Japan and other economies marked by shrinking households from aging demographics and a failure to assimilate most immigrants. Britain and France tried to tax the rich and failed, so middle class tax hikes may be in store and trigger new elections. Germany and Italy are increasing blaming the EU in Brussels for impeding innovation and hindering economic growth. In my opinion, the European Union may break up after the 2027 elections there, and I would not be surprised if Italy becomes our 51st state, since Brussels squelched Prime Minister Meloni’s plan to return Bank of Italy gold to Italian citizens.
The President is encouraging Europe to take better care of their citizens while protecting their borders and boosting prosperity. Ironically, formerly communist Eastern European nations – like the Czech Republic, Hungary, Poland and Slovakia – embrace America’s prosperous policies, while Western European nations lean more toward socialist welfare state policies. As a result, I would not be surprised to see the EC implode after a series of 2027 elections, when many anti-EU parties could take new leadership roles.
I hope you will remain bullish about America. Despite our domestic squabbles, like the opposition to ICE raids in Minneapolis, America simply has a better economic model, and these ICE raids in Minneapolis were instigated by a day care fraud which funneled money to terrorist groups from as early as a decade ago, in 2016, so the U.S. is trying to crack down on criminals and anyone facilitating their operations.
There is also an estimated $20-trillion of on-shoring coming to America. Our exports are now setting records and the trade deficit has shrunk to its lowest level in 16-years and could potentially disappear if the price of LNG, crude oil and refined products firm up, since the U.S. is a major energy exporter, so 6% GDP is possible at some point, and this new growth is not expected to be inflationary due to record energy production, falling home/rental prices and the facts about U.S. importing deflation from China.
AI is also making America more productive and the 4.9% productivity gain in the third quarter was the strongest I can remember, so all these efficiencies promote falling prices as well as GDP growth!
All content above represents the opinion of Louis Navellier of Navellier & Associates, Inc.
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President Trump Takes on Davos…and the World
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An Opportunity to Own SpaceX Pre-IPO
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Black Swans May Shock Us, But the Market Ignores Them
Global Mail by Ivan Martchev
Unintended Consequences (and Fed Chair Announcement) Alert
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