Francois Botha

Global equities enter 2026 after a powerful three-year rally driven by strong earnings, moderating inflation and accelerating AI-related productivity gains. The US remains the engine of global markets, supported by a pro-growth policy mix and robust corporate profitability. These factors suggest the bull market may still have room to run, particularly if earnings broaden beyond mega-cap AI leaders.

However, risks are building. Valuations are stretched, market leadership remains narrow, and any reversal in disinflation could force central banks to slow or pause rate cuts. Geopolitical tensions, elevated debt levels, and signs of speculative investor behaviour also introduce late-cycle fragility. Outside the US, Europe continues to lack catalysts, while emerging markets remain tied to China’s uneven momentum.

Overall, the backdrop remains constructive but increasingly delicate. Staying invested while focusing on quality, earnings durability, and maintaining flexibility for potential pullbacks remains the most balanced approach for early 2026.

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