Outlook 2026: Daniel Morris (BNP Paribas AM)

January 5, 2026

Outlook

^{This text was originally written in Dutch. This is an English translation.}

By Daniel Morris, Chief Market Strategist, BNP Paribas Asset Management

Where are the biggest opportunities and threats for 2026?

'In 2026, flexibility and selectivity will be essential for investors as markets adjust to greater fragmentation of the global economy.

Key themes for 2026 include the need for flexibility in fixed income strategies, given the challenges to economic growth and uncertain inflation expectations. We believe opportunities exist in defensive sectors, real estate and high yield investments, but a flexible approach is required.

Fixed income markets are poised to benefit from continued central bank easing, with lower interest rates expected in both the US and Europe. With potential pressure on government bond yields due to fiscal concerns, particularly in leading economies, the overall environment remains favourable for credit markets, with their attractive yields and solid corporate fundamentals.

Equity markets remain technology-driven, with US technology companies' earnings expected to grow robustly as artificial intelligence fuels capital expenditure and productivity gains. European equities offer compelling value, particularly as the region strives for greater strategic autonomy. Emerging markets, with their strong technology sectors, may benefit from lower US yields and a weaker dollar.

Private assets, particularly alternative credit and real assets, continue to attract capital, supported by resilient fundamentals and favourable policy tailwinds, although selectivity and thorough credit analysis are becoming increasingly important.

Sustainability remains a key focus. As regulatory frameworks evolve, European and Asian investors are leading the way in green bonds, decarbonisation and climate solutions. The transformative potential of AI remains, with robust fundamentals underpinning valuations and innovation creating new opportunities across various sectors.'