What's Next For Markets 2026 Outlook: Broader Leadership Ahead
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Jan 11, 2026 The conversation dives into a bullish outlook for 2026, highlighting key economic trends and promising sectors. Attention turns to Trump's affordability measures and their implications, as well as the potential for broader market participation beyond mega-cap tech. Michael points out favorable conditions for cyclical sectors like transportation and housing due to lower mortgage rates. Risks tied to economic overheating and rising interest rates are also discussed, offering listeners a comprehensive view of what to expect in the coming years.
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Macro Backdrop Explains Most Market Moves
- Macro trends drive ~70% of stock movements, so understanding the macro backdrop is essential.
- Michael Kantrowitz says a Goldilocks economy plus policy tailwinds can sustain market gains if rates stay contained.
Breadth Needs Earnings To Stick
- Past breadth rallies failed because they were PE-driven without improving earnings.
- Michael highlights that 2026 differs because earnings expectations are broadening, giving the move more durability.
Cyclicals Leading The Early Rally
- Early 2026 shows cyclical leadership in transportation, industrials, and consumer durables.
- Michael cites sector performance gains as evidence the market is broadening beyond mega-cap tech.