We expect US economic growth (GDP) to strengthen from about a 2.0% growth rate to 2.5% in 2026. We further expect global growth to approach 3.0% next year. We expect the drag from tariffs to diminish in 2026.

US corporate EPS will also broaden. We expect profit growth of US companies to exceed 10% next year. We caution that this expectation of growth is largely anticipated by markets given their 2025 performance.

We expect period of volatility in 2026 to exceed those of 2025 as high expectations meet reality. Sectors and companies that do not deliver results will see more severe market reactions. If we see industry leaders failing to meet guidance, a large sell off is likely in 2026. Yet we do not see markets or the economy at a lasting peak.

For tech companies, we expect profit expectations to grow as well as profitability. At some point, profitless companies are likely to lose their shine as the decreased likelihood of their reaching scale becomes apparent.

The FED is likely to pause rate cuts in mid-2026 after short- term rates fall from 5.5% in 2024 to 3.25% in 2026. We also expect that long term yields to stop falling.