Predictions for 2026 (And a Very Hot Take on Venezuela)

It will take a lot to rehabilitate Venezuela’s depreciated oil infrastructure, but in the meantime, diverting its heavy crude exports to the US would severely disrupt Canada’s and Russia’s exports and China’s imports – giving Trump important leverage in trade and other negotiations. In 2026, the post-pandemic productivity supercycle will continue. Real US GDP will beat 3%, defying the consensus. Core inflation will return to the Fed’s target. Fiscal policy will be accommodative, with relief from future tariffs and refunds for past tariffs, and the One Big Beautiful Bill fully in place. The Fed will cut rates three times, but that’s largely already in consensus. US earnings will, like 2025, lead the world – but, also like 2025, US stocks are the most expensive in the world, so lower-quality but cheaper beta plays will outperform, as they did in 2025. Within the US, sector performance will be, like 2025, a function of earnings growth, and valuation won’t matter. The AI sector will lead the way. Financials are a good bet on lower rates, deregulation and efficiencies from AI. Health care is a good bet – if not in 2026, then someday soon – on AI bringing productivity to a sector previously immune from it. Energy will benefit from oil prices starting 2026 at the bottom of the range, and from lagged effects of regulation. 4% is the floor for the 10-year yield, no matter what the Fed does. Gold is not signaling a crisis, but rather ratifying the idea of a global boom. After 2025’s sharp run-up, though, a correction is highly likely on technical grounds.