Which 2026 Prediction Do You Think Is Most Likely to Happen or Fail?
Morgan Stanley has just released its 2026 global strategy, and the message is clear: risk assets are set to lead. Supported by AI capital expenditure, a rare alignment of fiscal, monetary, and deregulation policies, and resilient U.S. economic growth, 2026 could be a strong year for investors who know where to focus.
Morgan Stanley expects strong performance for U.S. equities next year, with a year-end target of 7,800 for the S&P 500. They believe the U.S. recession is over, and that policy support and strong corporate earnings will continue.
Here’s a breakdown of their 10 key predictions:
1. Risk Assets Overall Poised to Shine
Equities are expected to outperform credit and government bonds.
U.S. stocks take the lead, with AI investment and supportive policies driving growth.
2. US Equities Lead the Pack
Benefiting from the “policy triumvirate” (fiscal, monetary, deregulation) and strong earnings growth.
Japan is a secondary pick, while Europe and EM face structural headwinds, except for Brazil and India.
Watch Out: A sudden drop in AI capex or risky financing could pressure U.S. equities.
3. Emerging Market Fixed Income Stays Attractive
Strong returns in H1, with consolidation in H2.
BB credit favored; CEEMEA and LatAm outperform Asia.
Upside: Stronger-than-expected growth in China could boost EM bonds and equities beyond forecasts.
4. Securitized Products Benefit from Deregulation
U.S. and European policy eases attract investors.
Short-term securitized credit, BBB- and agency MBS favored over IG.
Housing activity remains range-bound.
5. AI and Micro Drivers Take Center Stage
Data center and AI capex are still early-stage; $1.5 trillion financing gap remains.
Credit markets play a key role in enabling AI investment, creating differentiated performance across assets.
Risk: AI investment cycle ending early could hit both credit and equities.
6. Commodities: Metals Outperform Energy
Oil stable around $60/bbl; gold preferred.
Copper and aluminum face supply challenges; soybeans bullish.
7. G10 Rates: Duration Overweight in H1
Expect a front-loaded rally as the Fed cuts 50bp, with 10-year USTs reaching 3.75% mid-year before ending at 4.05%.
Europe, U.K., and Japan see milder rate movements.
Risk: Fed policy surprises or rising inflation expectations could hurt IG credit.
8. G10 FX – A Choppy Year Ahead
DXY dips to 94, then rebounds to 99; risk currencies like AUD and SEK gain early.
EUR and GBP lose steam due to divergent policies; USD/JPY could hit 140.
9. Corporate Credit Activity Rises
More capex and M&A; HY expected to outperform IG, financials > cyclicals.
CDX/iTraxx exposure preferred over cash.
Risk: An abrupt AI slowdown may reduce IG issuance but could trigger systemic concerns.
10. Policy Triumvirate Rarely in Sync
U.S. fiscal (OBBBA), monetary (Fed cuts), and deregulation policies align to support risk assets.
Globally, ECB and China easing + EU retail-focused initiatives add fuel.
Watch Out: Trade policies, tariffs, and Fed uncertainties remain key risks.
Let’s Discuss
How do you view Morgan Stanley’s 2026 predictions—optimistic or too bullish?
Which of the ten forecasts do you think is most likely to come true?
Which one do you think could go completely wrong?
You’re also welcome to share your own predictions in the comments, just like this user:
Prediction 1: Meta will cut capital expenditures and see a stock rebound
Prediction 2: The stock market will rise 10% in 2026
Share your thoughts for a chance to win Tiger Coins!
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
我发现最有说服力的预测是美国股市在盈利势头和政策利好的支持下表现出色。我不太有信心的部分是人工智能支出将继续平稳增长的假设——数据中心融资或资本支出的任何放缓都可能同时打击信贷和股票。
我自己的2026年看涨期权：人工智能资本支出保持在高位，但变得更具选择性，标普500可能会出现中个位数的涨幅，而由于改革和日本央行的稳定支持，日本的上涨悄然令人惊讶。
@TigerStars @Tiger_comments
The prediction likely to come true is AI capital expenditure driving growth. This is already happening as tech companies are heavily investing in data centers, cloud infrastructure and advanced chips, thus creating an engine for economic & earnings growth. This trend is likely to continue in 2026 & beyond.
However the prediction of a rare alignment of monetary & fiscal policies could go completely wrong. Political considerations, domestic economic pressures and divergent inflation trends across countries, could lead to divergent policies. This could create volatility and uncertainty in global markets.
Instead of taking these predictions as gospel truth, I would view it as a data point for my own research.
@Tiger_comments @Tiger_SG @TigerStars @TigerClub @CaptainTiger
Check them in the history - “community distribution“
Predication 2: Stock market crash in 2027.( 1987, 1997,2007,2017)
The forecast most likely to come true is the continued investment and productivity gains related to AI.
The forecast that could be wrong is of sustained, moderate global economic growth and gradual disinflation - with Trump around, we can guarantee this won't happen easily.
I do think that equities will outperform credit and government bonds as for most years and so most likely to come true. Earnings reports have been strong and definitely many expect rate cuts to happen next year as the Fed chair changes and is expected to align with trump’s wish of rapid rate cuts. This will be significant in driving the US stocks rally and AI definitely will be centre stage as the world capitalise on its potential and with the rapid advancements.
I think metals outperforming energy could go completely wrong considering how expensive metals already are. As uncertainty eases with wars ending and rate cuts, metals might plunge.
1. The Prediction Most Likely to Fail: A Smooth Macro and Even Rally Across Risk Assets
The idea that everything will move up in harmony is the weakest point. Bond markets are already signalling stress, supply chains look vulnerable, and geopolitical catalysts can flip risk sentiment quickly. Tech valuations sit at premium levels, and any slowdown in cloud spending or AI hardware demand will hit megacaps first. The soft landing story can wobble if inflation stays sticky or if the Federal Reserve pivots too slowly.
2. The Prediction Most Likely to Come True: United States Market Leadership
The United States will likely remain the world leader. AI capex continues to flow from Alphabet, Meta, Amazon and even Apple, while Nvidia still controls the most important part of the supply chain.
Prediction 2: collapse of the ai boom with a decline in $Microsoft(MSFT)$
預計股票的表現將優於信貸和政府債券。
美股一馬當先，AI投資和支持性政策推動增長。
It's like an addict unable to stop themselves. *Sniffling and scratching all over* "Sir, do you have more of that AI powder, I'm having withdrawal symptoms!"
On to the main topic, my agreed prediction (for the metal dominate energy point):
I think gold will indeed dominate. It has done really well ever since covid struck. In the past there were significant ups and downs, but now it's mostly a sustained climb.