The Markets Which Equity Markets Will Outperform?
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Jan 16, 2026 Kunal Shah, the Co-CEO of Goldman Sachs International and expert in global macro and market trends, dives into the dynamics shaping equity markets through 2026. He highlights the advantages the U.S. might have, including AI-driven investments and potential Fed cuts. Kunal also explores shifts in Europe and Asia that could offer unique opportunities. He discusses emerging markets like China and India benefiting from AI momentum, while emphasizing the significance of gold as a protective asset amid potential volatility.
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US Tailwinds Support Continued Outperformance
- The U.S. has strong tailwinds from Fed cuts, AI-driven capex, fading tariff drag, fiscal impulse and deregulation.
- These forces justify a continued US equity tilt even if valuation premiums have narrowed.
Valuation Premiums Reflect Earnings, Not Just Hype
- U.S. equity multiples are higher but partly merited by stronger corporate earnings growth.
- The dollar remains overvalued by roughly 15% vs. broad valuation models but has eased from last year's peaks.
Capital Is Staying More Homeward
- Structural shifts mean Asia and Europe may recycle less capital into the U.S. due to geopolitics and changed reserve and fiscal dynamics.
- That domestic capital reallocation supports potential outperformance in Europe and Asia if growth follows.