Tom McGrath

As we move into 2026, the market backdrop remains constructive but far from complacent. Inflation has eased, policy is becoming more supportive, and earnings momentum is holding up better than many expected, providing a solid foundation for risk assets. At the same time, leadership is broadening beyond the narrow AI winners, suggesting a healthier, more sustainable phase of the cycle. Political noise, fiscal uncertainty, and geopolitical risks will continue to generate volatility, but these are increasingly being treated as tactical risks rather than structural threats. We remain of the view that investors are still "renting pessimism while owning optimism", with positioning cautious but liquidity gradually returning. In this environment, disciplined diversification, selective risk-taking, and a focus on quality earnings growth should continue to be rewarded.

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