The Week That Shook the World

Dean’s note: This is no longer a quiet week. The Venezuela operation has rewritten the geopolitical landscape. Markets are digesting, not panicking—and that tells you something important about what this strike actually means for prices. More below.

A week that will be studied in history books - and what it actually means for your portfolio.

We started 2026 expecting a slow holiday hangover. Instead, we got the most significant U.S. military operation since Osama bin Laden's capture in 2011.

On January 3rd, U.S. forces launched Operation Absolute Resolve, capturing Venezuelan President Nicolás Maduro and his wife in a 30-minute raid on their Caracas compound. By Saturday afternoon, Maduro was blindfolded aboard the USS Iwo Jima, en route to face drug trafficking charges in New York. He pleaded not guilty Monday.

Markets absorbed the shock with surprising calm. The Dow hit a new all-time high Monday. Energy stocks surged - Chevron jumped 5.1% - on expectations that U.S. companies will eventually rebuild Venezuela's crumbling oil infrastructure. Bitcoin rallied above $93,000 as risk appetite returned. Gold climbed on safe-haven demand.

But here's what most analysts are missing: the muted market reaction isn't just about Venezuela's tiny share of global oil production. It's about what this operation signals for inflation - and that story is more complex than the headlines suggest.

Here's what's shaping money this week:

• Friday: December jobs report drops—economists expect 55,000 payrolls, unemployment ticking down to 4.5%

• Fed Chair Decision: Trump expected to announce Powell's successor "early January"—Hassett and Warsh are frontrunners

• Supreme Court Watch: Tariff ruling expected as early as this month; could force $100B+ in refunds

• CES 2026: Nvidia's Jensen Huang unveiled the Rubin AI platform and autonomous driving models - "Physical AI" is here

• Earnings Season Preview: Light week, but big banks kick off January 13

• Greenland Tensions: Denmark warns Trump to "stop the threats"-NATO alliance under strain

This is a week for watching, not reacting. Let's dig into what matters.

Let's be clear about what happened. At 2:01 AM Caracas time on Saturday, U.S. helicopters touched down at Maduro's fortified compound. Thirty minutes later, he and his wife were in custody. By dawn, they were aboard an aircraft carrier.

The operation was months in the making. The CIA had teams inside Venezuela. The military practiced on replica buildings. When a break in the weather opened a narrow flight window Friday night, Trump gave the green light.

Now, most of what you're reading elsewhere will tell you the immediate market implications are limited because Venezuela produces less than 1% of global oil. That's true - but it's also missing the point.

Let me tell you what this strike is really about: inflation.

This administration wants inflation dead. Full stop. Oil is baked into everything-transportation, plastics, chemicals, fertilizers. It's one of the biggest inputs into the CPI basket. When oil prices fall, inflation falls. When inflation falls, the Fed has room to cut rates. When rates fall, asset prices rise and the economy hums.

That's the chain. And Venezuela sits at the start of it.

Think about this operation as two messages sent simultaneously:

• Message to Russia and China: Hands off the Western Hemisphere. This is America's sphere of influence, and we will project power to defend it. The free world won't be pushed around.

• Message to oil markets: We're coming for every barrel. Venezuela has 303 billion barrels of proven reserves-the largest in the world. If the U.S. can unlock even a fraction of that production over the next decade, it adds to global supply and keeps prices suppressed.

Now, does this sound bullish for energy stocks? If you think so, get your ears checked.

Yes, Chevron jumped 5.1% Monday. Yes, oilfield services companies rallied. But zoom out. This administration isn't trying to make oil companies rich - it's trying to make oil cheap. Those are very different goals. When an administration explicitly signals it wants to flood the market with supply to crush prices, that's not a tailwind for the business model of yanking liquid gold from the ground.

The Monday pop in energy stocks was about the hope that U.S. companies will get lucrative contracts to rebuild Venezuelan infrastructure. That's a real opportunity - but it's years away, requires political stability we don't have, and depends on an investment climate that doesn't yet exist. JPMorgan sees production maybe reaching 1.3-1.4 million barrels per day within two years - but 2.5 million bpd could take a decade. Venezuela's state oil company says it would cost $58 billion just to get back to 1990s production levels.

Dean’s note:
 Maintain your exposure to energy at benchmark levels - maybe a little overweight, but nothing dramatic. The sector isn't going to zero, and diversification still matters. But don't chase this rally expecting energy to lead the market. The policy winds are blowing toward lower oil prices, not higher. And please - stay out of the silver trade right now. That market is volatile and crowded with momentum chasers. You have a higher chance of getting hurt than being right for a short time. Watch Colombia next - Trump explicitly warned President Petro on Sunday.

Two massive decisions loom this month, and both could reshape monetary policy for years.

First: Powell's replacement. Treasury Secretary Bessent confirmed the announcement is coming in January. The shortlist has narrowed to four candidates:

• Kevin Hassett — Current NEC Director, widely seen as the frontrunner

• Kevin Warsh — Former Fed Governor, nearly got the job in 2017

• Christopher Waller — Current Fed Governor, interviewed with Trump last week

• Michelle Bowman — Current Fed Vice Chair, longtime hawk, only Trump appointee among current board

Trump's "litmus test" is clear: he wants faster rate cuts. His public attacks on Powell - calling him "too late," "a fool," and threatening lawsuits - signal what he expects from any successor. Markets are already pricing in a more dovish Fed.

Here's the bigger picture: We're in an era where the value of money itself is under pressure. Governments around the world - not just the U.S. - are running massive deficits. When debts grow faster than economies, currencies lose purchasing power. That's why gold outperformed the S&P 500 by 47% last year. It's not just a safe haven; it's a hedge against the slow erosion of what a dollar can buy.

Second: The tariff ruling. The Supreme Court is expected to rule as early as this month on whether Trump's "Liberation Day" tariffs were legal. The stakes are enormous. Customs has collected over $200 billion in tariff revenue. If the Court strikes down the IEEPA tariffs, importers could be entitled to massive refunds.

During oral arguments in November, several justices - including Trump appointees - expressed skepticism about the administration's broad interpretation of emergency powers. Chief Justice Roberts raised the "major questions" doctrine, which limits executive action without explicit Congressional authorization.

Here's the twist: Even if the Court rules against Trump, the administration has backup plans to reimpose tariffs under other trade laws. And politically, striking down the tariffs might actually help Republicans - the tariffs have raised consumer prices and created business uncertainty. Sometimes losing a battle helps you win the war.

Dean’s note:
January 21 is also when the Supreme Court hears arguments on whether Trump can fire Fed Governor Lisa Cook. The ruling won't come until mid-2026, but it could determine whether future presidents can remove Fed officials over policy disagreements. Fed independence is on trial - and that matters for every asset you own.

While the world was watching Venezuela, Jensen Huang took the stage at CES in Las Vegas and declared a new era: Physical AI.

In a two-hour keynote, the Nvidia CEO unveiled Alpamayo - the "world's first thinking, reasoning AI for autonomous driving." Unlike previous self-driving systems that react to patterns, Alpamayo uses chain-of-thought reasoning, generating step-by-step decision logic that can handle rare edge cases.

The announcement marks a strategic pivot. For the first time in five years, Nvidia's CES keynote featured no consumer GPU announcements. The message was clear: enterprise AI and physical robotics are the future.

A word of caution: some prominent investors are warning that AI is entering "the early stages of a bubble." Valuations are stretched. Price-to-earnings multiples are elevated. Long-term expected equity returns, by some calculations, are hovering around 4.7% - historically low. That doesn't mean AI isn't transformative. It means the easy money may have already been made, and selectivity matters more than ever.

Key announcements:

• Rubin Platform: Nvidia's first six-chip AI platform, now in full production. Partners get access in H2 2026.

• Mercedes Partnership: The all-new Mercedes CLA will feature Nvidia's full autonomous driving stack - coming to U.S. roads this year.

• Vera Rubin GPU: Offers 5x more power than Blackwell for AI data centers.

• Robotaxi Timeline: Nvidia plans to test robotaxi services in 2027.

"The ChatGPT moment for physical AI is here," Huang declared. "Robotaxis are among the first to benefit."

Nvidia enters 2026 as the world's most valuable publicly traded company at $4.6 trillion. The stock rose over 30% in 2025, outpacing most of its "Magnificent Seven" peers. But expectations are sky-high - and when expectations are sky-high, even good news sometimes isn't good enough.

Dean’s note:
Physical AI - robots, autonomous vehicles, industrial automation - is the next frontier. The AI trade is evolving from "who makes the best language models" to "who puts AI in the real world." Stay invested, but stay diversified. The companies that win this race may not be the obvious ones.

If the Venezuela operation shocked the world, it also reignited fears for Greenland.

Hours after Maduro's capture, Katie Miller - wife of Trump's deputy chief of staff Stephen Miller - posted an image of Greenland covered in the American flag with the caption: "SOON."

Trump himself doubled down on Sunday. "We need Greenland from the standpoint of national security," he told reporters aboard Air Force One. "Denmark is not going to be able to do it."

Danish Prime Minister Mette Frederiksen's response was sharp: "Stop the threats." Greenland's Prime Minister Jens-Frederik Nielsen called Trump's remarks "very rude and disrespectful" and demanded "no more pressure, no more insinuations, no more fantasies of annexation."

Here's why this matters for markets: Greenland isn't just a frozen island - it's a NATO territory covered by the alliance's mutual defense guarantee. Any U.S. military action would fracture the Western alliance at a moment when Europe already feels vulnerable.

We're in a period of rising great-power tensions. The world order that existed since World War II is being tested. That doesn't mean panic - but it does mean diversification isn't just about asset classes anymore. It's about geographies, currencies, and exposure to different political systems. A portfolio that's 100% U.S. equities is making a concentrated bet on American stability that may not be appropriate for everyone.

Germany's foreign minister stated Monday that European allies would be "prepared to step in" if needed. France expressed "solidarity" with Denmark. The message is clear: Europe is circling the wagons.

The risk isn't that the U.S. invades Greenland tomorrow. The risk is that Trump's rhetoric - and the Venezuela precedent - creates a fracture in the NATO alliance that adversaries like Russia and China exploit. Watch European defense stocks and the euro for signs of stress. And remember: flexibility and mobility matter. The old rules about where wealth is safe may be changing.

The Week That Changed Everything - and Changed Nothing

I've been doing this for over two decades, and I can count on one hand the weeks that felt like this one.

A U.S. president ordered a military strike to capture a foreign head of state. That leader is now in a Manhattan jail cell. The administration is openly discussing "running" another country. And yet - look at your portfolio. The Dow hit an all-time high.

What do we make of this?

First, markets are not moral arbiters. They don't vote on whether an action is right or wrong. They price risk. And right now, the market is saying: the immediate economic risk from Venezuela is limited - and the potential benefit of lower oil prices and tamed inflation is significant. That's a mathematical judgment, not an ethical one.

Second, appreciate what this moment represents. The projection of American strength and power matters for investor confidence. It signals that the free world won't be pushed around - not by authoritarian regimes, not by adversaries testing our resolve. That's worth something. It helps explain why markets rallied rather than panicked.

Third, volatility is coming. The Supreme Court tariff ruling. The Fed chair announcement. The jobs report Friday. Earnings season next week. Any one of these could move markets significantly. All of them together? We're looking at a January that could set the tone for the entire year.

Fourth - and this is the hard part - none of us knows what happens next. I don't know if Trump will actually try to take Greenland. I don't know if the Supreme Court will strike down the tariffs. I don't know if the new Fed chair will slash rates or hold the line. Anyone who tells you they know for certain is selling something.

What I do know is this: the investors who panic, who react to every headline, who try to trade the news - they almost always underperform. The investors who build portfolios designed to weather many possible futures - diversified across asset classes, geographies, and time horizons - they tend to come out ahead.

The edge in investing doesn't come from chasing aggressive gains. It comes from avoiding deep losses. Once you focus on limiting drawdowns - on not getting knocked out of the game - long-term performance improves automatically.

So as you read the headlines this week - and there will be many - remember what we discussed last edition: Your retirement isn't won or lost in a single week. It's built patiently, consistently, deliberately over decades.

The world changed this week. Your investment strategy shouldn't.

Stay calm. Stay diversified. Stay the course.

— Dean