For markets, a more favorable policy and macro environment is likely to benefit risk assets, with U.S. stocks outperforming global peers. “This unusually favorable policy mix allows markets to shift focus from global macro concerns to asset-specific narratives—particularly those related to AI investments.” The Everestex reviews global economy is poised for solid growth in 2025, with the U.S. continuing to lead advanced markets. And so, if we’re wrong and the labor market sending the real signal, then the downside risk to the U.S. economy – and by extension the global economy – really is a recession in the U.S. The U.S. remains pivotal, and the U.S. led shocks – positive and negative – should drive outcomes for the global economy and markets in 2026, In the last few days, you’ve heard from my colleagues about our outlook for the global economy, equities and cross asset markets.

The Markets Are Walking A Tightrope How Can Investors Find Their Footing?

Gold is expected to remain strong in 2026 after repeatedly hitting record highs this year. “Greater animal spirits in the U.S., compared to more tempered corporate activity in Europe, means that European credit should outperform U.S. credit over the next 12 months,” Tang adds. Credit will also play a key role in the resurgence of M&A activity, with projected volume growth of 32% in 2025, followed by 20% in 2026 and 15% in 2027.

And in Europe, there’s this push and pull of fiscal policy across the continent. We think that continues for next year, and so they’re probably not quite going to get to their 5 percent growth target. Now that anodyne view, though, masks some heterogeneity around the world; and importantly, some real uncertainty about different ways things could possibly go. Serena, thank you so much for taking the time to talk with me today and let me ask the questions of you.

Top Stock Gainers And Losers

• Underlying our equities over credit over rates allocation is some revival in animal spirits, but it’s not the kind of irrational exuberance that marks the end of cycle in our view.
• Our multi-asset trading and market services cover 18 markets, one clearinghouse and four central depositories.
• And as a result, the disinflationary process has really still got some more room to run and that inflation will undershoot their 2 percent target, and as a result, the ECB is probably going to cut again.

And as in recent years, global outcomes will likely hinge on U.S.-led effects and their spillovers. The baseline assumes cuts to neutral as unemployment rises, followed by a recovery in the second half. Notably, they present upside scenarios exploring stronger demand and rising productivity, while the downside case remains relatively benign. Much of the client conversation at the summit was about the market outlook for 2026. Weak job data and deepening AI anxiety pushed the S&P 500 into the red for the year.

We expect both EM stocks and bonds to be supported by resilient – if steady – global economic growth and a stable to softer U.S. dollar. Fresh U.S. inflation and jobs data this week should clarify whether January’s price pressures fade and if the labor market’s “no hiring, no firing” stasis holds. On the equities side, we favor markets benefiting from even more AI capex. The MSCI emerging markets index notched a 9% gain last month – well above the 2.2% gain in its developed markets counterpart. We think emerging markets can deliver again after a stellar 2025.

Oil Gains Further As Concerns Over Us-iran Tensions Remain High

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Risk assets are poised for a strong year in a friendly policy and macroeconomic environment, with U.S. stocks outperforming peers. Carefully consider the Funds’ investment objectives, risk factors, and charges and expenses before investing. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. Earnings figures cited herein are from BlackRock Fundamental Equities, with data from Refinitiv and FactSet as of Nov. 19, 2025, with 452 companies (82% of S&P 500 market cap) reporting.

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Global Outlook: A Strong Year For Risk Assets

In Qatar, the information contained in this document is intended strictly for sophisticated investors and high net worth investors. This material may contain estimates and forward-looking statements, which may include forecasts and do not represent a guarantee of future performance. Since 1999, we’ve been a leading provider of financial technology, and our clients turn to us for the solutions they need when planning for their most important goals. Six to 12-month tactical views on selected assets vs. broad global asset classes by level of conviction, February 2026 This information should not be relied upon as investment advice regarding any particular fund, strategy or security. The table below reflects this and, importantly, leaves aside the opportunity for alpha, or the potential to generate above-benchmark returns – especially at a time of heightened volatility.

Ai Funding Needs A Factor For Credit Markets

We prefer EM hard currency debt and stay selective in EM equities, favoring mega force beneficiaries. We see bullish themes that drove EM outperformance in 2025 still playing out – though we favor selectivity as dispersion rises. We also see the rewiring of global supply chains benefiting Mexico, Brazil and Vietnam, while stronger commodity prices are a boon to Latin America. We favor leaders in China’s new economy – AI, automation and renewable energy. Demographics are also a strength for countries like India as major economies struggle with aging populations. The big increase in AI capital spending plans announced by the U.S. mega cap tech “hyperscalers” should be another positive, in our view.

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Marathon Earnings: Impressive Refining Capture Drives Strong Results

• So where do you see the biggest drivers of global growth in 2026, and what are some of the key downside risks?
• And that frees up markets to shift the focus from global macro concerns, which of course have dominated this year, to more micro asset specific narratives.
• A little bit more than that for global GDP growth on like a Q4-over-Q4 basis.
• There’s another factor embedded in our more constructive take.
• The significant spike in debt issuance by the tech sector should result in wider U.S. investment grade spreads.

Now, given the starting point, given how low unemployment is, given the spending businesses are doing for AI, if we did get that recession, it would be mild. We’ve also had very, very weak employment data. We see the really tepid growth there pushed down by the deflationary spiral they’ve been in. But once the economy works its way through the tariffs, maybe some of the lagged effects of monetary policy, we’ll start to see things pick up a bit in the second half of the year. But at the same time, we think inflation is going to keep drifting down in most of the world.

• So, from unsecured to structured and securitized credit in both public markets and private markets, credit will likely play a central role in enabling the next wave of AI related investments.
• Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
• I think very much like U.S. equities, we believe that the asset class can benefit from the combination of monetary deregulation policy.
• That spending could just stay strong, and we might see this upside surprise where the spending really dominates the scene.

Meanwhile, high-yield corporate bonds are likely to outperform investment grade debt given that high-yield is relatively insulated from a spike in AI-related issuance. The significant spike in debt issuance by the tech sector should result in wider U.S. investment grade spreads. Of the estimated $3 trillion in data center-related capex that Morgan Stanley expects to see, less than 20% has been deployed to date. Although the dollar should continue weakening through the first half of 2026, a rebound is likely around the second quarter, marking the end of its bear market.

Explore how Nasdaq indexes are shaping the modern economy – igniting innovation, unlocking opportunity, and building the financial infrastructure of the future. In an "outstanding" 2025, Nasdaq exceeds $5 billion in net revenue for the first time as as both top-line and bottom-line metrics saw strong growth. We advocate for effective and resilient capital markets. Overview page represent trading in all U.S. markets and updates until 8 p.m. Dow Jones Industrial Average, S&P 500, Nasdaq, and Morningstar Index (Market Barometer) quotes are real-time.

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The Fed faces a familiar conundrum softening labor markets versus solid spending. But what we see is micro trends driving the markets in ways that adapt to a generally positive stance on risk. On today’s podcast, I will focus on the outlook and key themes ahead for the global fixed income market. Global inflation and growth should moderate next year, but the range of possible economic outcomes is wide as uncertainty remains high.