Global Investment: Annual High-Risk Bull Market Forecast

Key Chapter Title List

1. 2025 Review: Tailwinds Weaken, Tail Risks Increase
2. 2025 Top Ten Predictions: Scorecard
3. 2025 Top Ten Predictions: Scorecard (Continued)
4. Observations: Positive and Negative Factors
5. 2026 Outlook
6. 2026 Top Ten Predictions
7. 2026 Top Ten Predictions (Continued)
8. Focus on Five Factors: Key Elements for 2026
9. About Crossmark Global Investments
10. Disclaimer

Document Introduction

This report was published by Crossmark Global Investments in January 2026, aiming to provide a systematic outlook and risk forecast for the global financial markets in 2026, particularly the U.S. market. Based on a comprehensive review of 2025 market performance (assessing the accuracy of the annual top ten predictions in a scorecard format) and incorporating current macroeconomic indicators, policy environment, and market sentiment, the report presents ten core predictions for 2026 themed "High-Risk Bull Market".

The report has a clear and logically progressive structure. First, it reviews the 2025 market trend of "everything rising," noting that the main drivers were the AI boom, relatively controlled inflation, strong corporate earnings, and expectations of central bank interest rate cuts. Despite volatility from trade policy uncertainty and geopolitical tensions, major asset classes, except oil, delivered strong returns. The report candidly admits that its 2025 thematic judgment of "Tailwinds Weaken, Tail Risks Increase" was overly conservative. Subsequently, the report provides a detailed assessment of the accuracy of the 2025 top ten predictions in a scorecard format (seven of which were deemed correct or partially correct), providing an empirical basis for subsequent forecasts.

In the current situation analysis section, the report lists seven positive factors (such as good corporate earnings, the Fed having begun rate cuts, AI boosting profit margins) and seven negative factors (such as high valuations, sticky inflation, weak consumer spending, increased speculative activity, and escalating U.S.-Russia/NATO, U.S.-China tensions). Against this contradictory backdrop, the report looks ahead to 2026, believing the U.S. will continue to be the global growth engine, supported by an AI-driven supercycle, a new tax bill ("One Great and Beautiful Bill"), deregulation, and events like the World Cup and the U.S. 250th anniversary. However, good growth may bring upward inflationary pressure, while high valuations and widespread investor complacency make the risk-reward ratio less favorable.

The core section of the report presents ten specific predictions for 2026 with detailed explanations. The predictions cover economic growth, inflation, Treasury yields, corporate earnings, stock market returns, sector performance, relative performance of international equities, AI theme volatility, the trend in faith-based investment asset allocation, and U.S. midterm election results. The report forecasts that the U.S. economy will experience slight acceleration in growth, but inflation will remain sticky and difficult to reach the Fed's 2% target; the 10-year Treasury yield will fluctuate within a high range; corporate earnings growth may fall short of consensus expectations, making double-digit stock market gains difficult; the Technology, Communication Services, and Financials sectors are expected to outperform; international equities are poised to outperform U.S. stocks for a second consecutive year; the AI field will remain volatile and elevate overall market volatility.

Finally, the report distills the "Focus on Five Factors" as an investment strategy framework, covering five dimensions: Economy/Earnings, Fixed Income, Equities, Sector Allocation, and International Investment, and provides specific asset allocation recommendations, such as maintaining flexibility, focusing on quality, buying on dips/selling on rallies, and increasing international allocation. The report emphasizes that while the top-down growth and policy outlook is favorable for risk assets, this is largely reflected in asset prices, necessitating extra caution in investing and close attention to earnings revisions and Fed policy moves.

The content of this report represents solely the views of Crossmark Global Investments and does not constitute investment advice. All investments involve risk, including the possible loss of principal.