Outlook for 2026: Magnificent 7 in last chance saloon?

Outlook for 2026: Magnificent 7 in last chance saloon?

27 Jan 2026

Alasdair Gill, Partner and Head of Equity Research at XPS Investment recaps on 2025, and outlines some pointers for investors to consider in 2026.

Last year we expected markets to be “kept on their toes” with Donald Trump re-entering the White House in the USA, and we were not wrong. Economies in general did continue to grow steadily, and the continued strong performance of equities surprised many - whilst bond returns were more muted. However, inflation started to come under control in many of the major economies, and the path of interest rates started to fall.

So what to expect in 2026? In this piece we will consider whether the Magnificent 7 have run their course and what new acronyms we will be talking about. Has inflation been tamed, enabling central banks to cut interest rates further? Where can investors look to diversify, given the elevated global equity market valuations? And finally, as geopolitics look to continue to be “front and centre”, how can investors build in resilience into their portfolios?

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