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  • Middle East Conflict – 2 March 2026

    In the early hours of Saturday, 28 February 2026, the US and Israel launched a major coordinated military strike on Iran. The operation, one of the most significant in the region in decades, killed Iran’s Supreme Leader Ayatollah Ali Khamenei, the Commander-in-Chief of the Islamic Revolutionary Guard Corps (IRGC), and senior security official Ali Shamkhani. Targets included nuclear facilities, ballistic missile sites, military command centres, and leadership compounds across the country.

    Iran retaliated within hours, firing waves of missiles and drones at US military bases and allied nations across the region, including Bahrain, Kuwait, Qatar, the UAE, Jordan, and Saudi Arabia. The Port of Jebel Ali in Dubai was struck. Dubai International Airport suspended flights indefinitely. Iranian missiles also targeted British military bases in Cyprus. The conflict had spread well beyond Iran’s borders.

    Iran has since imposed an internet blackout and declared 40 days of national mourning. Yet alongside footage of demonstrations against the US and Israel, other videos have emerged showing Iranians celebrating Khamenei’s death in cities including Tehran — a reminder that Iran’s population remains deeply divided, and the country’s political future is far from settled.

    At this stage, no single outcome is certain. Situations like this rarely unfold according to a neat script. What we can do is map the most plausible scenarios and their likely impact on financial markets.

    Scenario 1: Regime Collapse and Transition

    Timeframe: Weeks  |  Oil: Falls below US$70  |  Equities: Strong rally

    The decapitation of Iran’s top leadership is more complete than in any previous confrontation. With Khamenei and the IRGC leadership gone, the remaining regime has lost both its symbolic authority and its military command chain. Domestic protests, already significant, could now escalate rapidly.

    If a transitional government emerges and opens negotiations with the US, the geopolitical risk premium that has weighed on markets for years could evaporate quickly. Oil prices, after an initial spike, would fall sharply below US$70. Equity markets would likely rally strongly. Gold would pull back from elevated levels.

    This is the best possible outcome for investors, and it is now nearly as likely as our base case.

    Scenario 2: Short Conflict, Ceasefire (Our Base Case)

    Timeframe: 4–6 weeks  |  Oil: US$80–90, then eases  |  Equities: -10%, then recovers

    US and Israeli strikes continue for two to four weeks, further degrading Iran’s military capacity. Iran retaliates, but with diminishing effect. A ceasefire is eventually brokered, most likely through Oman or the United Nations, in exchange for Iran’s new leadership council agreeing to US demands on its nuclear programme.

    Oil prices spike to the US$80-90 range in the near term but ease once it becomes clear that the Strait of Hormuz will remain open. Global share markets enter correction territory, a fall of around 10%, before recovering over the following four to six weeks. Gold remains elevated throughout. This is currently the most likely single outcome.

    Scenario 3: Prolonged Conflict via Iran’s Proxy Network

    Timeframe: Months  |  Oil: US$85–100 sustained  |  Equities: Ongoing pressure

    For this scenario to unfold, Iran’s allied militant groups, Hezbollah in Lebanon, the Houthis in Yemen, and Iraqi militias, would all need to enter the conflict simultaneously. At present, each group is calculating its own interests carefully.

    Hezbollah is weighing its own survival and facing domestic Lebanese political pressure to stay out. The Houthis have issued threats but have not yet acted. Iraqi militias have called for action but are conscious of Baghdad’s fragile political dynamics. The scenario becomes more likely, however, if the US or Israel strikes Houthi or Hezbollah territory directly.

    If it does materialise, oil would remain elevated at US$85-100 for months, keeping inflation high and complicating the outlook for interest rates. Share markets would remain under sustained pressure, and safe-haven assets such as gold, US government bonds, and the US dollar would stay in strong demand. This would be the most damaging sustained outcome for investors.

    Scenario 4: Strait of Hormuz Closure (Tail Risk)

    Timeframe: Months  |  Oil: Well above US$100  |  Equities: -15% to -20%

    The Strait of Hormuz is the narrow waterway through which approximately 20% of the world’s oil supply passes each day. If Iran’s remaining leadership, facing total collapse, decides to attempt to close or severely disrupt it through mine-laying or attacks on Gulf oil infrastructure, the consequences for energy markets would be severe.

    Oil could surge well beyond US$100 per barrel. Global share markets could fall 15–20% in a sharp sell-off. Inflation expectations would spike, making it very difficult for central banks to cut interest rates as they might otherwise wish to. Energy company shares would be among the very few to benefit.

    This remains a tail risk, unlikely, but not impossible. The key trigger would be a moment when Iran’s regime concludes it has nothing to lose.

    Scenario 5: Rapid Negotiated Settlement

    Timeframe: Days  |  Oil: Returns below US$70  |  Equities: Rally

    Iran’s new leadership council, under overwhelming military pressure and facing domestic collapse, moves quickly to accept US demands in exchange for an immediate ceasefire. There are already tentative signs this may be in play: Iran’s Foreign Minister has publicly stated that Tehran is interested in de-escalation. Oman, a traditional back-channel mediator between Iran and the West, remains actively engaged. President Trump has acknowledged that Iranian leadership has requested talks.

    If realised, markets would recover swiftly. Oil would fall back toward pre-conflict levels. Share markets would rally. This is the least probable of the five scenarios, but the diplomatic signals are worth watching closely.

    What Should Investors Focus On?

    With events moving this quickly, the situation does not yet warrant major changes to portfolios. What matters more right now is knowing which signals to watch.

    • The Strait of Hormuz. Any credible reports of mine-laying or attempts to block the strait would be the single most important signal for oil prices and markets overall. This is the trigger most worth monitoring.
    • Iran’s proxy forces. If Hezbollah begins firing rockets into Israel, or if the Houthis resume attacks on shipping in the Red Sea, the probability of a prolonged conflict rises significantly.
    • Diplomatic signals from Tehran. Public statements from Iran’s new leadership council, whether indicating openness to talks or pledging total resistance, will be among the clearest near-term guides to how this unfolds.

  • Market Wrap For Week Ending 20 Feb 2026

    The Supreme Court just kneecapped Trump’s “anytime, anywhere” tariffs

    The US Supreme Court ruled (6–3) that President Trump exceeded his authority using the International Emergency Economic Powers Act (IEEPA) to impose broad global tariffs. (Reuters)

    But the ruling didn’t end tariff risk, it reshaped it. Within hours, Trump pivoted to a temporary 10% duty (reported as a 150-day measure with exemptions for some categories), and his team signalled new investigations under other legal authorities. (Reuters)

    Nonetheless, policy uncertainty stays high, even if the legal “shortcut” is narrower. Reuters notes trade partners may gain some bargaining power, but Washington can still apply pressure via other channels, though these are narrower, slower and more procedural. (Reuters)

    The US military build-up in the Middle East is now market-relevant again

    While tariffs grabbed the headlines, the more serious tail risk was geopolitical. This month highlighted one of the largest US military deployments in the region since 2003, with rising concern that diplomacy could be eclipsed by escalation dynamics. (Reuters)

    This is the classic recipe for oil volatility and risk-premium swings because markets price in the possibility of rapid escalation. We cannot rule out the region sliding towards conflict as military preparations build.

    More AI disruption on software stocks

    Software stocks continue to suffer. A sharp drawdown earlier this month tied to fears that new AI tools could commoditise parts of the software stack, citing roughly $830bn wiped from software and services market value over six trading days. (Reuters)

    What this means is that investors are no longer attaching a high valuation to these companies as their earnings growth rate is at risk. The rotation away from growth stocks (at risk from AI disruption) to value stocks (benefits from AI usage) remains intact.

    The Great Rotation continues: Europe is still getting the marginal dollar

    European inflows remained a major theme. According to data from EPFR, which tracks fund flows globally, European equity funds have attracted approximately $10 billion in each of the past two consecutive weeks, putting February 2026 on course to be the single highest month for inflows into European stocks ever recorded.

    Price action has matched the story. Bloomberg reported the Stoxx Europe 600 hit an all-time high around 630, with rotation partly driven by investors seeking diversification away from US tech turbulence and relatively cheaper valuations. (Bloomberg.com)

  • Despite Growing Backlogs, Investors Are No Longer Optimistic About Profitability

    Based on Q4 results, the AI Hyperscalers’ backlog continues to grow. Microsoft and Oracle are the leaders. Their fortunes are increasingly tied to OpenAI. Profits need to catch up with investments eventually, if their stock prices are to continue going up. Currently, the big spenders are seeing their stock prices drop.

  • AI Stocks Fall as Amazon and Google Signal Massive Capex: Market Wrap (6 Feb 2026)

    Key Takeaways

  • Amazon and Alphabet beat revenue expectations but stocks fell on AI capex concernsSoftware stocks remain structurally weak despite oversold conditionsInvestors continue rotating out of US growth into value, small caps and ex-US marketsBitcoin rebounded sharply, but gold remains the preferred hedge

    • Amazon and Google Earnings Highlight AI Capex Risks

    Two AI hyperscalers reported earnings and gave guidance on CapEx spending. Amazon beat on revenues but miss earnings expectations, while Alphabet exceeded analysts’ estimates on both count. Both saw their stock price fall on concerns about their CapEx ROI. Amazon is planning to spending $200bn while Alphabet has $175bn in mind.

      Software Stocks Extend Selloff as Growth Expectations Reset

      Claude’s latest model sent the already weak sector into another round of selling. While it is true that the sector is oversold, investors should look at how the relative performance of the software sector has underperformed the market for a while. Growth expectations for this sector need to be reset, making the case for further underperformance.

      Rotation Out of US Large-Cap Growth Continues

      The week saw investors maintaining the trend of favouring Ex-USA stocks over the S&P 500, Value over Growth and Small Caps over Large Cap stocks. This is a healthy sign of market rotation as the global growth outlook remains intact. In fact, market breadth in US equity markets remains positive.

      Crypto vs Gold: What the Divergence Is Telling Investors

      Bitcoin crashed before staging a meaning rebound on Friday. Gold spent the week clawing back some of the losses after the previous week crash. The market’s disdain for technology could be a reason why investors are favouring gold over crypto, in the same vein as how value is outperforming growth.

  • Bank Pulse Check: What America’s Biggest Banks Are Telling Us About the Economy

    Banks sit at the intersection of households, businesses, markets, and cash flows. Their earnings calls, especially the Q&A, reveal what people are actually doing, not just what they say they feel.

    This latest round of earnings calls from large money-centre banks and major regional banks tells a surprisingly consistent story.

    The banks we looked at

    Money-centre banks

    • JPMorgan Chase
    • Bank of America
    • Citigroup
    • Wells Fargo

    Large regional banks

    • U.S. Bancorp
    • PNC Financial Services
    • Truist Financial
    • Citizens Financial Group
    • Fifth Third Bancorp

    Together, these banks touch most of the US consumer, SME, and corporate economy.

    No bank is talking like a recession is already here.
    At the same time, none are behaving as if growth is re-accelerating.

    What we hear instead is a classic late-cycle tone:

    • steady activity,
    • selective caution,
    • intense focus on credit quality and deposits,
    • and growing reliance on fee income rather than pure lending growth.

    Credit conditions: late-cycle, not crisis

    If there were real economic stress, it would show up first in:

    • provisions,
    • non-performing loans,
    • and sharp tightening of credit standards.

    That is not what banks are describing.

    Instead:

    • Credit costs are rising slowly, largely as expected
    • Banks are monitoring pockets of weakness, not broad sectors
    • Commercial real estate remains a concern — but it is contained and well-telegraphed

    Business activity: cautious, but still moving

    From JPMorgan down to Fifth Third, banks describe a similar corporate environment:

    • Companies are not aggressively expanding, but they are not freezing either
    • Capital markets activity (trading, advisory, underwriting) has improved from weak levels
    • M&A discussions are happening, even if execution is slower

    Importantly, loan demand is modest, not collapsing.

    If a recession is coming, the banks aren’t seeing it yet.
    What they see instead is an economy that is tired, adapting, and still standing.

  • Market Wrap For Week Ending 30 January 2026

    The “Sell America” Trade Gains Momentum

    The US Dollar Index fell to approximately 95.5, its lowest level since February 2022. This decline coincided with President Trump’s comments expressing comfort with a weaker dollar and concerns about tariff policies. International investors reduced exposure to US assets, with the Euro rising to around $1.04-1.05 and the Swiss Franc gaining ground.

    Precious Metals Hit Historic Highs, Then Retreat

    Gold broke through $5,000 per ounce on 26 January, reaching approximately $5,500-5,600 by 29 January before sharp corrections. Silver surged to near $120 per ounce, then suffered its worst single-day decline since 1980, falling 26-30%.

    Expect a period of consolidation or correction as speculators are cleaned out.

    Technology Sector Shows Diverging Fortunes

    Meta’s shares surged 8-10% on strong AI-driven results, whilst Microsoft suffered its worst single-day decline since March 2020 (approximately 10%) due to slower cloud growth. Reports confirmed major technology firms have channelled over $120 billion in AI data centre financing through off-balance-sheet arrangements, raising transparency concerns.

    Central Banks Navigate Currency Volatility

    The Federal Reserve held borrowing costs steady at 3.5%-3.75% on 28 January, noting inflation “remains somewhat elevated.” More dramatic was the Japanese yen’s rally from near 159 to 154-155 after Japanese officials warned about “excessive” currency movements and the Federal Reserve Bank of New York made enquiries that often precede intervention. It may be tough for the new Fed Chair to cut rates further unless we get a material slowdown in the economy.

  • Weekly Market Wrap – 16 Jan 2026

    US-Europe Tensions Over Greenland

    President Trump announced 10% tariffs on eight European countries (Denmark, Norway, Sweden, France, Germany, UK, Netherlands, Finland) effective February 1, escalating to 25% on June 1 unless a deal is reached on Greenland. This represents a significant escalation in transatlantic tensions.

    Leaders from Europe issued a joint statement, saying they stand united with Denmark and Greenland. They started discussing retaliatory strategies but given how fractious the bloc is, the response is likely to be delayed and watered down.

    The key point is that Trump is forcing Europe to move faster on the new security and economic arrangements, as the US focuses on the Americas.

    Broadening of Equity Market Leadership: The Great Rotation is underway

    The Russell 2000 has surged 5.8% year-to-date through mid-January, significantly outperforming the S&P 500’s 1.9% gain, marking a decisive regime shift. The S&P 500’s forward P/E has surged to 22.4x versus Equal Weight at 17.0x, a valuation gap that looks to be closing. After three years of mega-cap dominance, mid-caps and equal-weight strategies are breaking to record highs, signaling healthy market breadth.

  • Weekly Market Wrap: A Strong Start to 2026

    The first full trading week of 2026 delivered record highs, geopolitical shocks, and a noticeable shift in market leadership that has investors reconsidering their portfolios.

    1. Stocks Hit Record Highs Despite Mixed Jobs Data

    Friday’s close capped an impressive week for U.S. equities, with both the S&P 500 and Dow Jones hitting all-time highs. The S&P 500 gained 1% for the week, the Nasdaq climbed 1.3%, and the Dow advanced 1.2%.

    December’s employment report delivered a mixed but ultimately reassuring message. While job gains of 50,000 fell short of the 73,000 expected, the unemployment rate surprised to the downside, dropping to 4.4% from the forecasted 4.5%. Markets interpreted this as evidence that the labor market is cooling without cracking, exactly the soft landing scenario the Federal Reserve has been aiming for.

    2. The Venezuela Shock That Rocked Energy Markets

    In what will surely be remembered as one of 2026’s most dramatic geopolitical moments, U.S. Delta Force operators captured Venezuelan President Nicolás Maduro and his wife during a predawn raid in Caracas on January 3rd. The operation, which caught Maduro sleeping in his home, immediately sent shockwaves through global energy markets.

    Energy stocks surged on the news, with Chevron jumping 5% in a single session as investors anticipated the lifting of sanctions and potential access to Venezuela’s massive oil reserves. Oil prices climbed sharply, and the entire energy sector rallied as traders repositioned for a dramatically different supply landscape.

    3. Beyond the Magnificent Seven: A Healthier Bull Market Emerges

    Perhaps the week’s most encouraging development for market sustainability was the broadening of gains beyond big tech. As concerns about AI valuations prompted some caution, investors rotated into previously overlooked opportunities.

    Small-cap stocks led the charge, with the Russell 2000 notching a 1.4% gain, while the equal-weighted S&P 500 rose 1.2%, both outpacing the market-cap-weighted index. Value stocks outperformed growth, and defense shares reached all-time highs on the back of geopolitical tensions and budget expectations.

    4. TSMC Crushes Revenue Expectations on AI Chip Demand

    Taiwan Semiconductor Manufacturing Company delivered a powerful signal about AI’s momentum on January 9th, reporting fourth-quarter 2025 revenue of NT$1.046 trillion (approximately $33.1 billion). The number beat analyst expectations of around NT$1.036 trillion and represented a robust 20.45% increase from the same quarter a year earlier.

    As the primary chip manufacturer for AI giants like Nvidia and Apple, TSMC’s results offer a direct window into the health of AI infrastructure spending. The strong performance came despite normal seasonal softness in other segments like smartphones, underscoring just how powerful AI demand has become.

    TSMC’s Taipei-listed shares gained over 44% in 2025, and this revenue beat reinforces the bullish thesis. But investors aren’t celebrating just yet as they wait for management’s guidance for 2026.

    The Bottom Line

    The first full trading week of 2026 reflected resilient risk appetite and a willingness to look past geopolitical developments in favour of solid fundamentals. The broadening of market leadership is particularly encouraging, suggesting this is not just another AI-driven melt-up.

    Still, concerns about valuations, particularly in technology and artificial intelligence, have not disappeared. They have just been overshadowed temporarily by positive momentum and improving breadth.

    The market has shown it can handle surprises, but 2026 is young, and there’s plenty of year left for things to get interesting.

  • Thoughts on Venezuela

    1. What’s Happening in Venezuela Now?

    The situation in Venezuela has dramatically shifted at the start of 2026. A U.S-led military operation resulted in the capture of President Nicolás Maduro, with the United States now actively asserting control and signalling intent to involve U.S. energy firms in reviving the country’s oil sector. 

    This follows months of escalating pressure:

    The U.S. imposed new sanctions on Venezuelan oil firms, tankers, and traders throughout late 2025.  A blockade and seizure operations targeted sanctioned oil vessels, part of a broader strategy to choke revenue flows to the Maduro government.  Switzerland froze assets linked to Maduro after his capture, adding to international punitive measures. 

    Taken together, these moves signal escalation.

    2. Macroeconomic Conditions: Still Fragile

    Venezuela’s economy remains deeply unstable and disconnected from normal financial markets:

    Official figures show significant currency depreciation, with the bolívar drastically losing value against the U.S. dollar.  Inflation is highly elevated and macro conditions are deteriorating, reflecting long-standing structural weaknesses rather than strengthening stability.  There is no reliable evidence of broad macroeconomic recovery or sustained de-facto dollarisation enough to anchor stability.

    In short, the economy is far from a stabilised, investible environment.

    3. Oil Production and Global Market Implications

    Venezuela still holds the largest proven oil reserves globally, estimated at around 303 billion barrels, but output has collapsed due to decades of underinvestment and sanctions. 

    Recent news suggests U.S. policymakers and markets are contemplating opening the country’s oil industry to Western investment, which could lift production over time. However:

    Revival of Venezuela’s oil infrastructure faces major technical, legal and political barriers. Analysts stress that production growth will likely be a long, costly process, even if U.S. firms engage.  Oil markets have largely shrugged off Venezuela-related volatility in the short term, with price moves modest and market focus still dominated by global supply dynamics. 

    Investor reactions this week have been mixed, energy stocks have rallied on optimism about future access (+2.74%), but oil prices have not priced in a near-term supply shift.  

    4. Financial Market Impacts

    Energy equities: U.S. oil and service stocks have gained as markets price potential future involvement in Venezuelan production. 

    Risk sentiment: Geopolitical uncertainty, especially involving U.S. intervention and sanctions escalation, has lifted safe-haven assets in some trading sessions. 

    Emerging markets and commodities: Venezuela remains too isolated to be a core theme for EM allocations; its influence on broader risk appetite is unfortunately insignificant .

    5. Bottom Line for Investors

    No clear path yet toward reintegration of Venezuela into global financial markets. Oil export restoration is a long-horizon structural question, not a catalyst for immediate price shifts. The key investment signal is geopolitical risk.

  • 2026 Investment Outlook: Investors Need More Discipline

    Looking back at 2025, the world adapted to trade wars under President Trump as inflation moderated and AI adoption accelerated. The global economy ends the year positively with central banks easing policy. Despite alarming headlines, geopolitical shocks remained mild whilst valuations became the key focus as AI-related stocks struggled in the final quarter. Looking ahead, investors need greater caution as strains emerge in parts of the global economy.

    United States Economic Outlook: Uneven but Sustained Growth

    The US expansion continues but unevenly, with strength concentrated in specific sectors and income groups. Consumer spending, representing 70% of GDP, increasingly depends on higher-income households supported by strong equity markets and accumulated wealth, even as lower-income consumers face tighter credit and higher costs.

    Business investment in artificial intelligence, data centres, semiconductors and automation lifts capital expenditure across manufacturing, healthcare, finance and logistics. Companies are also mobilising capital to strengthen supply chains and critical materials amid national security concerns.

    Monetary policy becomes less restrictive as the 10-year Treasury yield falls from 4.8% to 4.2%, easing pressure on households and businesses, though inflation risks remain. Fiscal policy stays supportive through Trump’s One Big Beautiful Bill, boosting 2026 growth via tax cuts that enhance household incomes by 5% on average, alongside infrastructure and manufacturing incentives.

    The labour market cools but doesn’t collapse, with slower job growth and moderately rising unemployment. Trade policy and geopolitics remain key uncertainties that could add costs and weigh on confidence.

    China Economic Outlook: Quality Over Quantity

    China shifts from property-driven growth towards economic quality and resilience. Beijing prioritises technological resilience and domestic demand through income support, better safety nets and service access. Consumer spending in services, travel, healthcare, education and leisure provides a stable growth base, though households remain cautious.

    Innovation-led growth drives investment into AI, automation, semiconductors, robotics and advanced manufacturing for productivity gains and geopolitical resilience. Exports contribute meaningfully in high-tech and green industries, but policymakers emphasise quality over volume to reduce vulnerability to trade tensions.

    Policy remains supportive but targeted towards consumption, strategic industries and infrastructure rather than broad credit expansion. The property sector remains a structural headwind following China Vanke’s near-default and a 39% Q4 sales drop for listed developers, reinforcing Beijing’s urgency to nurture new growth drivers.

    European Economic Outlook: Stabilisation and Balance

    Europe’s economy shifts towards stabilisation with more balanced, internally driven growth. Household consumption re-emerges as the primary engine as eased inflation allows real wage recovery and near-record employment supports confidence.

    Investment improves through lower interest-rate pressure, EU Recovery and Resilience Facility disbursements, and Germany’s fiscal loosening supporting infrastructure, digitalisation, energy transition and defence. Labour markets remain stable with historically low unemployment and positive wage growth supporting productivity gains through technology adoption.

    Monetary policy becomes more predictable as inflation nears the ECB’s target, offering businesses and households greater visibility. Exports contribute modestly whilst exposure to global trade uncertainty limits upside, though cheaper imports help contain inflation.

    Japan Economic Outlook: Self-Sustaining Momentum

    Japan shows signs of durable expansion as household consumption emerges as a genuine growth engine. A tight labour market delivers meaningful wage gains whilst moderating inflation towards the Bank of Japan’s 2% target should improve real incomes and support discretionary spending.

    Corporate Japan enters 2026 with healthy balance sheets and elevated profits, channelling capital expenditure into automation, digitalisation, AI and green technologies. Labour shortages accelerate productivity-enhancing investment whilst governance reforms encourage better capital allocation.

    The Bank of Japan’s gradual policy normalisation will anchor inflation expectations and reduce market distortions. Lower, more stable inflation should support household purchasing power despite modestly higher borrowing costs. Exports remain important in semiconductors and precision machinery but won’t be a major driver given global uncertainty.

    Global Stock Market Outlook 2026: Selectivity Over Momentum

    Global equities enter 2026 with restraint rather than exuberance in a more selective, fragile regime. Monetary policy settles at structurally higher neutral rates that can support equities with durable earnings and pricing power, making valuation discipline critical.

    Sustainable equity performance requires profits to broaden beyond technology leaders into financials, industrials, healthcare and services. AI’s role evolves from building to effective deployment, rewarding companies translating it into tangible productivity gains and higher margins.

    Governments direct investment towards defence, infrastructure, energy security and strategic supply chains, creating spending multipliers. Valuation discipline returns as investors become more cost-conscious, favouring earnings quality and value stocks.

    Investment Risks 2026

    Significant tail risks include a disorderly US fiscal event from elevated debt triggering Treasury auction failures or yield spikes. Geopolitical disruption to semiconductors or rare earth supply chains could hit margins directly and revive inflation. Financial stress in private credit, hedge funds and non-bank lenders could trigger forced selling across risk assets.

    Conclusion: Investment Strategy 2026

    The global economy appears resilient but increasingly uneven in 2026, with growth driven by narrower forces. Markets enter a regime where earnings quality, balance-sheet strength and valuation discipline matter again. The key risk is complacency: elevated debt, geopolitics and hidden leverage demand investors prioritise selectivity, diversification and discipline over momentum.