Outlook H1 2026
Weekly Podcast and Snapshot: Cooling of investors over-optimism
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Following the strong momentum led by technology stocks in the US and in Asia, concerns rose over the elevated valuations that tech stocks had reached.
Over the last week, a mini correction was seen, sending among others bitcoin down by 29% and tech giant Oracle by 34% from its September highs. This setback of global and US stocks should not worry investors as the Nasdaq 100 index has merely returned to the level it had reached in early October.
However, while more speculative names and the tech sector stumble, other sectors are taking over leadership of the global stock market. Pharmaceutical & biotech sectors are lately outperforming the Nasdaq Index. Another more surprising outperforming industry in November is Oil & Gas.
We maintain our positive 12-month view on global stocks and would suggest that now is a good time to look at sectors and stocks displaying relative strength outside of technology.
5 themes for H1 2026
Emerging market stocks to rebound further versus US on weaker USD, cheap valuation, lower interest rates, improving earnings. China to benefit from further government stimulus, ultra-low short- and long-term interest rates, retail fund flows into stock markets. Brazil and Mexico should see strength from interest rate cuts, strong domestic currencies, benefits from higher commodity prices and increased oil production.
Global tech arms race: competition between the US and China in AI and other related technologies ensures increasing investment in AI and data centres globally, not necessarily in the interests of shareholders. Governments to strategically support domestic industries via selective investment, a loose regulatory regime and via accelerated tax write-offs on investment. Accelerates take-up of AI outside of tech, benefiting early AI adopters in sectors such as financial services, health care and professional services. A potential negative for employment growth given near-term pressure on white collar jobs.
Commodities to rise further, led by precious metals, strategic metals (copper, aluminium, tin, zinc, rare earth), natural gas and uranium in energy. Driven by growing demand, limited supply growth, geopolitical pressures, energy security and de-globalisation trends limiting export of key strategic metals and minerals.
Government stimulus to boost growth: German/EU defence and infrastructure spending to increase in 2026, China to support property market and domestic consumption further (involution campaign) via further…
