The State of Markets: “US Equities: What’s Leading in 2026?”
Key parts of the global equity market have started the year strongly. In the US, the gains have been led by cyclically sensitive parts of the market, including small-caps, mid-caps, and transports (see chart below). Large caps, in contrast, have lagged behind, with the S&P500 only up +1% as of yesterday’s close (and with the equal-weighted S&P500 up 2.5%, see below).
The key question, therefore, is: How long will that leadership last? And what’s the outlook for equities in 2026? Our near-term (1–4 month) US equity views were set out in this week’s Tactical Equity Asset Allocation update. Our strategic (6 month to 2 year) global asset allocation views were updated in late December (and included our outlook for 2026).
Next week it’s all eyes on Tuesday’s US CPI report for December. There’s also a strong housing theme, with new & existing home sales on Tuesday & Wednesday, followed by the NAHB home builders index on Friday. Other key data and events include the NFIB small business report (Tuesday), PPI (Wednesday), and several speeches from key Fed Presidents. Next week is also the start of the Q4 earnings season in earnest, kicking off with JPMorgan on Tuesday and other banks through the week. Key Asian macro data will include Japanese money supply (Tuesday), as well as Chinese money and credit growth for December (Wednesday). Please see below for a full list of next week’s key macro data, events, and earnings.
Key chart: YTD performance – various US equity indices (%)
Upcoming Important Data/Events This Week:
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Events: |
NB despite the re-opening of the US government, some US macro data releases are still delayed. |
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Monday: |
Australian ANZ-Indeed job advertisements (Dec, 12:30am); Australian household spending (Nov, 12:30am). |
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Tuesday: |
US headline & core CPI (Dec, 1:30pm); US new home sales (Oct, 3pm). |
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Wednesday: |
Chinese imports, exports, & trade balance (Dec, 3am); Chinese M0, M1 & M2 money supply (3am), total social financing & new yuan loans (10am) – all Dec; US retail sales (Nov, 1:30pm); US existing home sales (Dec, 3pm). |
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Thursday: |
UK RICS house price balance (Dec, 12:01am). |
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Friday: |
NAHB homebuilders index (Jan, 3pm). |
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Key earnings: |
JPMorgan, Bank of New York, Delta Air Lines (Tues); Bank of America, Wells Fargo & Co, Citigroup (Wed); Morgan Stanley, Goldman Sachs, BlackRock, TSMC (Thurs). |
Key Research
Longview on Friday, 9th January 2026:
“AI Podcasts, Webinars, Affordability Crises and the ‘Big 5’ 2026 Price Outlooks”
Affordability has, once again, been one of the key ‘political’ watchwords this week.
On Wednesday, President Trump raised the ‘housing affordability’ issue in a post on Truth Social:
“For a very long time, buying and owning a home was considered the pinnacle of the American Dream. It was the reward for working hard, and doing the right thing, but now, because of the Record High Inflation caused by Joe Biden and the Democrats in Congress, that American Dream is increasingly out of reach for far too many people, especially younger Americans. It is for that reason, and much more, that I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it. People live in homes, not corporations. I will discuss this topic, including further Housing and Affordability proposals, and more, at my speech in Davos in two weeks.”
Source: President Trump, Truth Social https://truthsocial.com/@realDonaldTrump/posts/115855059527504524
A cursory glance at the National Association of Realtors (first time) affordability index makes the point abundantly clear (fig 1). In Q3 last year, the index was at 66.9, broadly where it has been for the past three years and at around its worst levels since the early 1980s. Not surprisingly, that challenging affordability is reflected in the Michigan ‘homebuying conditions index*’, which is also at record lows.
Key North American Macro Data & Events:
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Events: |
NB despite the re-opening of the US government, some US macro data releases are still delayed. Speeches by Fed’s Bostic (Mon, 5:30pm), Barkin in fireside chat (Mon, 5:45pm), Williams (Mon, 11pm), Musalem (Tues, 3pm), Barkin (Tues, 9pm), Paulson on economic outlook (Wed, 2:50pm), Miran in Athens (Wed, 3pm), Bostic (Wed, 5pm), Williams (Wed, 7:10pm), Bostic at Metro Atlanta Chamber (Thurs, 1:35pm), Barkin on Virginia economic outlook (Thurs, 5:40pm), Jefferson (Fri, 8:30pm); Fed publishes its Beige Book (Wed, 7pm). |
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Monday: |
N/A |
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Tuesday: |
US NFIB small business optimism (Dec, 11am); US ADP weekly employment (1:15pm); US headline & core CPI (Dec, 1:30pm); Canadian building permits (Nov, 1:30pm); US new home sales (Oct, 3pm); US federal budget balance (Dec, 7pm). |
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Wednesday: |
US headline & core PPI (Nov, 1:30pm); US current account balance (Q3, 1:30pm); US retail sales (Nov, 1:30pm); US existing home sales (Dec, 3pm); US business inventories (Oct, 3pm). |
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Thursday: |
Canadian existing home sales (Dec, 10am); Canadian wholesale & manufacturing sales (Nov, 1:30pm); US Philadelphia Fed business outlook (Jan, 1:30pm); US weekly jobless claims (1:30pm); US Empire manufacturing (Jan, 1:30pm); US imports and exports price indices (Nov, 1:30pm); US total TIC flows (Nov, 9pm). |
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Friday: |
Canadian housing starts (Dec, 1:15pm); US New York Fed service sector business activity (Jan, 1:30pm); US capacity utilization, industrial & manufacturing production (Dec, 2:15pm); NAHB homebuilders index (Jan, 3pm). |
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Key earnings: |
JPMorgan, Bank of New York, Delta Air Lines (Tues); Bank of America, Wells Fargo & Co, Citigroup, Infosys ADR (Wed); Morgan Stanley, Goldman Sachs, BlackRock, Compagnie Financiere (Thurs); PNC Financial (Fri). |
Fig B: US headline & core CPI (Y-o-Y %)
Key European Macro Data & Events
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Events: |
Speeches by ECB’s Guindos in Madrid (Mon, 8:50am & Wed, 8:20am), Villeroy in Paris (Mon, 5pm); ECB publishes Economic Bulletin (Thurs, 9am). |
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Monday: |
Eurozone Sentix investor confidence (Jan, 9:30am); German current account balance (Nov). |
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Tuesday: |
French budget balance (Nov, 7:45am). |
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Wednesday: |
N/A |
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Thursday: |
Headline & core CPI – all December final estimates – for France (7:45am) & Spain (8am); German GDP (2025, 9am); industrial production for Italy & Eurozone (9am & 10am, respectively – both Nov); trade balance for Eurozone & Italy (10am & 11am, respectively – both Nov). |
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Friday: |
Headline & core CPI for Germany (7am) & Italy (9am) – both December final estimates. |
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Key earnings: |
Richemont (Thurs). |
Fig C: Eurozone Sentix investor confidence Index
Key UK Macro Data & Events
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Events: |
BOE’s Dave Ramsden speaks at King’s College London on ‘The evolution of resolution’. |
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Monday: |
N/A |
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Tuesday: |
BRC retail sales (Dec, 12:01am). |
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Wednesday: |
N/A |
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Thursday: |
RICS house price balance (Dec, 12:01am); monthly GDP estimate, industrial & manufacturing production, goods trade balance & construction output (Nov, 7am); BOE liabilities/credit conditions survey (9:30am). |
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Friday: |
N/A |
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Key earnings: |
Reliance Industries Ltd (Fri). |
Fig D: BRC retail sales (Y-o-Y %)
Key Asia-Pacific Macro Data & Events
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Events: |
N/A |
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Monday: |
Australian ANZ-Indeed job advertisements (Dec, 12:30am); Australian household spending (Nov, 12:30am); Australian Westpac consumer confidence (Jan, 11:30pm); Japanese current account & trade balance (Nov, 11:50pm) & bank lending (Dec, 11:50). |
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Tuesday: |
Japanese M2 & M3 money supply (Dec, 11:50pm). |
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Wednesday: |
Australian employment data (Nov, 12:30am); Chinese imports, exports, & trade balance (Dec, 3am); Chinese M0, M1 & M2 money supply (3am), total social financing & new yuan loans (10am) – all Dec; Japanese machine tool orders (December first estimate, 6am); Japanese PPI (Dec, 11:50pm). |
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Thursday: |
Australian consumer inflation expectations (Jan, 12am). |
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Friday: |
N/A |
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Key earnings: |
TSMC (Taiwan Semiconductor Manufacturing Company) (Thurs). |
Fig E: Chinese M1 & M2 money supply growth (Y-o-Y %)
This Week:
Longview on Friday, 9th January 2026:
“AI Podcasts, Webinars, Affordability Crises and the ‘Big 5’ 2026 Price Outlooks”
Tactical Equity Asset Allocation No. 264, 7th January 2026:
“Stay Tactically OW Equities (for now)”
The SHORTVIEW (& market positioning), 5th January 2026:
“Oil: Supply Surplus vs. Relief Rally – What’s Next?”
Daily Dose of Macro & Markets:
Daily Dose of Macro & Markets 8th January 2026:
“China: Will Incremental Easing Be Enough?”
Daily Dose of Macro & Markets 7th January 2026:
“The Correlation Compass: Navigating New Macro Regimes”
Daily Dose of Macro & Markets 6th January 2026:
“A Week is a Long Time in Politics”
Weekly Risk Appetite Gauge:
'Weekly Risk Appetite Gauge', 5th January 2026:
“US Equities - Near Term Upside Likely”
Last Week:
No research this week given holiday season.