Our 2026 Outlook, “Resilience and rebalancing,” argued that firmer global growth would favor non-US equities and weigh on the US dollar. We believe recent events have delayed but not curtailed this story. In a world undergoing immense disruption, we believe resilience endures – and provides a favorable investment environment.
Our outlook reflects these two key themes:
A world disrupted
In the first half of the year, the global economy has contended with various forces of disruption, including the rise of artificial intelligence, geopolitical fractures, the closure of the Strait of Hormuz, and an upset to energy and commodity supplies.
Resilience endures
Private-sector leverage has fallen since the Global Financial Crisis, in our analysis. Meanwhile, previous rate cuts in the US and UK, alongside looser fiscal policy in Europe and Japan, are supportive of a measured re-leveraging through stronger investment and spending, in our view.
The growth-inflation backdrop is less supportive than we expected at the start of the year, but not weak enough to prevent global equities from delivering positive returns in 2026, in our view.
