Drama In The Markets, LFG Daily - February 2, 2026

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Luke Lloyd, CEO Lloyd Financial Group

With markets experiencing heightened volatility and no shortage of headlines driving daily moves, today felt like the right day to pass the torch. Rather than add more noise, I’m turning today’s commentary over to Colin Symons, who will walk through what’s happening beneath the surface of the markets, how our investment team is thinking about risk, and where we see opportunity in the midst of the turbulence.

Periods like this are when disciplined strategy matters most — and Colin does a great job breaking that down. I’ll be back tomorrow with more perspective, but for today, I’ll let the investment team take it from here.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

Colin Symons, CIO Lloyd Financial Group

Lots of drama in markets, lately. Was that the top? Are we in trouble? Is the world ending?

As always, ideally, you can correctly identify exactly what’s going on. I’d say the basic source of all this trouble is that we’ve had volatility in foundational assets like the dollar and the yen. This has the effect of ‘shaking the tree,’ causing volatility in other assets, like precious metals, bonds, and stocks.

This foundational volatility in FX continued into Friday, and in my mind is the fundamental reason for the continued volatility we see in markets (1Y yen vol, below.) I want to emphasize this is volatility, not straight downside. I’d view it more as a rotation, as capital runs away from assets that are viewed as unfriendly to it and towards assets it thinks are better.

Yes, if you believe there is a fundamental change, you do want to shift. Do you believe the dollar and yen are now set to trend higher? Then you probably do want to shift into safer assets. For my part, I regard this as noise. Are we going to stop cutting rates and start hiking them? That may be a narrative, but the bond market is signaling no change at all. With the new Fed pick, I’d say the bias is towards more cuts, not fewer.

When markets started acting up on Thursday, I sold some stocks (EW and CNQ) to free up cash. My expectation is that we’ll put that back to work in a reasonably aggressive, but diversified, manner. The basic drivers of this market still seem intact, to me. What I’m waiting for is to see FX volatility settle down or find a good support level.

No doubt, the currency (FX) volatility is shaking the tree, raising volatility elsewhere, and forcing a de-risking. The thing is, as long as it’s not a new trend, that just creates fertile soil for further upside. As long as the drivers are there to support markets, we can go up. As skies clear, we can get another rush to buy.

While most people now seem to have a time horizon of one to three days, I’m trying to hold for longer periods. I’m comfortable doing that and historically that’s where I get the best after-tax returns. However, there will always be times like this to test your mettle. As long as the conditions are good, I try to stick with good ideas.

You can make a lot of money by picking good stocks and waiting. When things like this happen, that waiting can be hard. There’s nothing wrong with trimming, if you want. Last week, for instance, I wrote about trimming precious metals, which seems like a good idea, now. For that matter, if you want to have time horizons less than a week, that’s fine too, as long as it works for you. It’s just a different model with different drivers.

For my part, I’m willing to do the waiting. I view it as a competitive advantage that I can hold through choppy periods. I just have to make sure the thesis is intact. In this case, if we do see a new trend develop in FX, I’ll be happy to shift. So far, I just view this as some volatility that shouldn’t last.

PPI was 0.5% m/m vs. est. 0.2%, while Core was 0.7% vs. exp. 0.2%. That gets the Y/Y number up to 3%, largely on Services costs, rather than Goods. Ouch.

Kevin Warsh was nominated as the new Fed chair. The media wants to label him as a hawk or a puppet. I think that’s the wrong focus. Warsh believes the old model of inflation caused by workers getting paid too much is wrong, and it’s more about when the government prints too much. Further, productivity is up and that should continue with AI, which is deflationary. So, limit government spending and fraud, a productivity boom will create disinflation, and we cut rates.

The Senate passed a resolution to open the government but the House likely won’t pass it until Monday or Tuesday, leading to a brief shutdown.

The US and Iran are scheduled to meet this week, sending oil -5%.

Silver found itself an impressive -40% from its top at the worst, on Friday. Considering the ATH was Thursday, that’s pretty impressive. I expect there were forced liquidations in there. If you’re curious, I show silver is still up 15%, YTD, as of market close.

Metals are falling again today, with silver and gold both about -4%, though off lows. The CME raised margins again, given the volatility.

Bitcoin fell to a 10-month low in Asian trading, though it has been bouncing off those levels.

ISM Manufacturing PMI, today, along with the QRA borrowing estimate.

What does it all mean? Asian markets had their round of stress and we’re bouncing. Can we recover soon?

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

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