Shockwaves & Signals - Venezuela, Markets, & What Comes Next In 2026: The Weekly Sift Stack - 1.5.2026 (Issue 9)

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Index Tracker 1-year Performance 2025:

• S&P 500 TR: 17.88%

• NASDAQ: 20.36%

• Russell 2000 TR: 12.81%

• MSCI International EAFE TR: 31.22%

• Bloomberg U.S. Aggregate Bond Index: 7.3%

• 10-Year Treasury Yield: 4.163%

• 30-year Mortgage Rate: 6.15%

• Gold: 67.41%

• Bitcoin: (6.02)%

• U.S. Dollar Index: (9.41)%

• Core Inflation:

  • Year Over Year: 2.8% - 11.30.2025

  • Month Over Month: 0.2% - 9.30.2025

• Consumer Price Index

  • Year Over Year: 2.6% - 11.30.2025

  • Month Over Month: 0.3% - 9.30.2025

Index Tracker Notes:

The S&P 500 endured a sharp drawdown in April 2025, sliding nearly 19% as aggressive tariff moves rattled markets. Once the most severe trade measures were paused, risk appetite returned quickly, fueling a powerful rebound. By year-end, the index notched 39 record highs and finished the year up 17.88% with dividends reinvested, driven by AI-led tech momentum (magnificent 7), easing trade tensions, expectations for Fed rate cuts, and resilient corporate earnings.

Gold finished the year as the top performer out of the assets and indexes we track. This is on the back of uncertainty around inflation and geopolitics that tends to push investors toward the yellow metal.

The U.S. dollar index finished last because its usual advantages faded. Fed rate cuts narrowed the yield gap, making U.S. assets less compelling. Trade uncertainty from tariffs weighed on confidence, while the U.S. federal debt continue to rise. In turn, the decline in the U.S. dollar makes American goods and services cheaper for foreign buyers, which is why we have seen the international markets have their best year since 2003.

Sector of The Week: Energy - State Street Energy Select Sector SPDR ETF (XLE)

The energy markets took full advantage of the U.S.’ move in Venezuela over the weekend, with companies like Exxon Mobil (XOM), Chevron (CVX), Conoco Philips (COP), and Valero (VLO) with massive jumps throughout Monday and the energy sector being up over 5% over the past 5 days.

So why is this all happening? Venezuela’s oil infrastructure has been in severe decline since the 1970s, when the nation was producing as much as 3.5 million barrels per day of crude - representing over 7% of global oil output. As of last year, Venezuela averaged some 1.1 million barrels per day at just 1% of global production - about the same as the U.S. state of North Dakota (sourced from Reuters). Currently, the U.S. is planning to deploy major domestic oil companies to repair that infrastructure and restore the country’s crude oil productions.

State Street Energy Select Sector SPDR ETF (XLE) Key Facts

• Equity Holdings: 22

• Top 10 Holdings & Portfolio Weight:

  • Exxon Mobil - 23.63%

  • Chevron - 17.61%

  • ConocoPhillips - 7.13%

  • Williams Companies Inc - 4.53%

  • SLB Ltd - 4.19%

  • EOG Resources Inc - 4.05%

  • Kinder Morgan Inc Class P - 3.83%

  • Phillips 66 - 3.7%

  • Valero - 3.53%

  • Marathon - 3.48%

• 76% of Assets in Top 10 Holdings

• 52-week range: $47.41-$37.24

• PE Ratio: 15.52

State Street Energy Select Sector SPDR ETF (XLE) vs SPDR Shares S&P 500 ETF (SPY) over the past 5-years

Weekly Insight: Venezuela’s Shock - Regime Change, Oil Leverage, & Global Fallout

The U.S. launched a major strike in Venezuela that led to the capture of President Nicolas Maduro and his wife, who were taken to New York to face narco-terrorism charges. While the operation weakened Maduro’s inner circle, key allies still retain control inside the country. The move has drawn sharp scrutiny from Democrats and world leaders, with Trump warning that Venezuelan Vice President Delcy Rodriguez could face even tougher consequences if she resists cooperation.

Strategically, the administration is positioning this as a transitional intervention. Trump suggested the U.S. could oversee Venezuela during a political handoff, using oil sanctions and regional military pressure as leverage. Venezuela leads the world in oil reserves, representing major upside for US companies, but years of economic collapse and distressed debt complicate the path forward, making this a high stakes mix of geopolitics, energy, and global risk.

Notably, OPEC+ (Organization of the Petroleum Exporting Countries) has maintained its oil output as of 1/4/2026. OPEC is the oil market’s control room, a coalition of major oil producers and oil-dependent nations that coordinate supply to influence global prices and protect profits. Founded in 1960 in Baghdad by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela, its core power comes from one lever - how much oil hits the market.

Wall Street’s Projections for S&P 500 Returns in 2026

It is important to note that we are entering the year with Morningstar currently rating U.S. Large Cap (essentially the S&P 500) as 2.8% underpriced as of 1/2/2026. According to CNN Review of Wall Street Forecasts that covers 16 major financial institutions, the median projection is roughly 12% growth for 2026 - the S&P 500 going from 6845.50 and finishing out the year at 7650.

Did You Know?

Sift Stack Flashback: “The Start of The 8-Hour Work Day”

On January 5, 1914, Ford Motor Company announced they would pay factory workers $5 per day for an 8-hour work day, almost doubling wages.

Poll Question

Last week’s poll results - “Of the AI power players crowned by TIME Magazine’s 2025 “Architects of AI” Person of The Year, who is most likely to dominate the AI landscape a year from now?”

1. 67% Voted - Jensen Huang: $150b net worth, CEO of NVIDIA (NVDA)

2. 25% Voted - Elon Musk: $450b net worth, CEO of Tesla (TSLA)

3. 8% Voted - Mark Zuckerberg: $200b net worth, CEO of Meta (META)

   

   Pictured is Jensen Huang, CEO of NVIDIA

Feel free send feedback or further input on the poll question to [email protected] or [email protected]. We would love to hear from you!