Laurent Denize, Global Co-CIO, ODDO BHF Asset Management.
“2026 begins much as 2025 ended: the tech boom continues, but risk factors remain present. To capture the value creation generated by technology companies, the two areas that remain key are the United States and South-East Asia, with China at the forefront.”
Was last year simply too good to be true? Despite geopolitical tensions, erratic tariff policies and Donald Trump’s confrontational governing style, global stock markets proved surprisingly robust. Emerging markets were among the winners, and corporate bonds also delivered impressive returns. Accordingly, US equities and bonds attracted substantial capital inflows. However, scepticism grew beneath the surface of the rally. The gold price surged by a whopping 65%, surpassing the USD 4,000 mark for the first time in October – a clear signal of rising demand for crisis hedging. At the same time, the US dollar weakened, suggesting international investors are increasingly questioning the political stability of the US and the reliability of its government. Against this backdrop, investment alternatives outside the US continue to attract interest.
USA: Tailwind for the economy and stock markets
The key question for 2026 is: Will the bull market continue, or will three years of rising valuations in the technology sector ultimately force a reversal? A look at the US reveals mixed signals. The labour market is showing signs of cooling: unemployment rate climbed from 4.2% in April to 4.6% in November, and job growth has also been losing momentum. At the same time, the risk of inflation has not increased despite higher tariffs – leading markets to expect several interest rate cuts over the course of the year. Combined with the income-boosting effect of the One Big Beautiful Bill, this should provide a strong tailwind for both the economy and stock markets. Consumption remains broadly flat but continues to hold up, supported by rising asset values and anticipated tax breaks, particularly in the higher income brackets. Despite a historically high estimated 12-month P/E ratio in the S&P 500, the increase in free cash flow and returns on equity – both unmatched globally – partly justifies these valuations. The polarisation in a handful of heavyweights has certainly stretched certain market capitalisations, but once equally weighted, the index remains broadly in line with its 10-year average.
