The 2026 update seeks steady compounding by rightsizing equity risk, anchoring in high-quality fixed income, and preserving sleeves in real assets and select alternatives so portfolios remain resilient across a range of outcomes. In this edition of the Weekly Market Commentary, we highlight some key elements of the 2026 SAA update.
Wall Street narratives rarely stay still, and recent weeks have underscored how quickly sentiment can change as perceived new information challenges the status quo.
After a stellar 2025 in which emerging market (EM) equities returned 34%, 2026 is off to a good start with the MSCI EM Index up 7% year to date. Last year’s near doubling of the S&P 500 return was driven mostly by a weakening U.S. dollar, which propped up EM returns, but attractive valuations and artificial intelligence (AI) investment played a role. This week we highlight five reasons we’ve warmed up to EM.
After a stellar 2025 in which emerging market (EM) equities returned 34%, 2026 is off to a good start with the MSCI EM Index up 7% year to date. Last year’s near doubling of the S&P 500 return was driven mostly by a weakening U.S. dollar, which propped up EM returns, but attractive valuations and artificial intelligence (AI) investment played a role. This week we highlight five reasons we’ve warmed up to EM.
The Federal Reserve (Fed) enters 2026 navigating potentially constrained policy conditions as resilient growth and above‑trend inflation intersect with an increasingly unsustainable fiscal trajectory. Fed Chair Jerome Powell emphasized that federal debt growth requires eventual corrective action, even if near‑term market risks remain limited. Rising primary deficits at near full employment further limit long‑run policy flexibility, while expanding Treasury financing needs — and a growing reliance on short‑duration bills — heighten rollover risk and amplify sensitivity to the Fed’s policy rate.
Productivity growth is the key mechanism that allows the U.S. economy to expand above its long‑run trend without reigniting inflation.
Policy dynamics ranging from robust central‑bank gold purchases to evolving trade and geopolitical strategies significantly influenced price action across the metals landscape. Together with structural supply shortages and rising industrial demand, these factors have created a powerful backdrop that continues to shape market volatility and performance. In this week’s Weekly Market Commentary, we explore the drivers behind the strength in metals, the associated risks, and the outlook for the durability of the rally.
With 2025 behind us, it’s a good time to celebrate some of our better forecasts from last year while also reviewing some misses we can learn from. In our view, we got more right than wrong last year, but there were some misses among our tactical asset allocation recommendations. For the second straight year, as the bull market marched on, the most impactful decision we made was probably to recommend investors stay fully invested in equities at benchmark levels throughout the entire year despite elevated valuations.
Our 2026 fixed income outlook calls for a rangebound rate environment, cautious Fed policy, and a modest increase in spreads within corporate credit markets.
The bull market appears poised to extend its run in 2026, fueled by ongoing enthusiasm around AI and further easing of monetary policy from the Federal Reserve (Fed).