The appropriate amount of greed + 10 surprises for 2026 - VP 2026 Themes (Part 1, Dec. Macro Snapshot)

This is part 1 of our 2026 outlook on the most top of mind topics in macro and markets. Upcoming reports will focus on G3 economies and outliers within DM and EM.

• The cyclical policy and macro backdrop remains supportive of risk assets next year. We acknowledge legitimate concerns about US labor/housing markets and high equity valuations, but still see opportunities in equties among EM, value, and laggards amid stable bond yields and a mixed dollar outlook.
• Although consensus expectations are not as uniform as last year, we once again present our 10 surprises for 2026 in tribute to Byron Wien.

Top 10 Surprises for 2026

1. Trump’s capex boom arrives a year late, broadens beyond AI
2. US growth surprises to the upside despite muted labor market
3. Housing disinflation breaks sticky inflation narratives
4. US 10y yields go nowhere, trades in a tight range around 4%
5. Value equities outperform growth
6. G10 FX divergence: Apac (AUD & NZD) over Europe (EUR & GBP)
7. EM equities outperform DM, led by Brazil
8. Oil trades below 50 and above 75 at some point during the year
9. China tech stocks outperform US tech stocks
10. Capital Cycle: US regional banks & energy services outperform