Market Outlook 2026: Climbing towards new highs

The global economy’s resilience confirms that the cycle is not merely standing its ground, but evolving. Looking ahead to 2026, we anticipate an environment of sustained growth, contained inflation and economic policies that support activity, setting up a favourable framework for investment and diversification. Against this backdrop, we highlight three major investment ideas for the year:

• Global equity: climbing towards new highs beyond the US technology sector, more countries and more sectors are joining in the rally.
• Fixed income: opportunities for policy normalisation in Brazil and the UK, without losing sight of carry in the Eurozone.
• Gold: a natural portfolio diversifier and long-term structural tren.

This year we present our Capital Market Assumptions (CMAs), which are allowing us to incorporate alternative assets in multi-asset portfolios and more efficiently harness the sources of structural returns offered by markets. The CMAs model is proprietary and places conventional assets and private markets in a single analytical framework, aimed at providing a robust and long-term view of expected returns, risk and correlation between asset classes. This framework strengthens the analytical basis for our strategic decisions and builds on our global investment approach.

Equities remain at the core of our strategy for 2026. The global backdrop supports this constructive view, which is further reinforced across most major markets when we drill down to the local level. From the broadening of earnings growth in the United States -extending beyond AI-related technology- to near double-digit earnings growth estimates in the Eurozone and the momentum of Latin American markets, equities combine global macro tailwinds and domestic support, consolidating as the main growth engine in diversified portfolios.

While valuations are demanding in some markets, we do not believe this prevents indices from continuing to reach new highs. Periods of economic growth expansion and sustained corporate earnings growth are typically accompanied by higher multiples. In that context, the main historical triggers for turning points in equities have been recessive environments or aggressive rate-hiking cycles -neither of which form part of our central scenario.

The path toward neutral policy rates progresses at different speeds across geographies. This divergence opens opportunities in UK and Brazilian sovereign bonds, where carry combines with our expectation of rate cuts -potentially deeper than the market is currently pricing. In the Eurozone, strong corporate fundamentals and historically attractive carry make credit a stable source of return for 2026.

Source of all charts: Bloomberg y Santander AM

CMAs for public and private markets

These three key investment ideas reflect the combination of our global and local capabilities and are supported by our proprietary CMAs framework- an approach that allows us to integrate traditional and private markets in a single analytical model. Looking ahead to 2026, we identify European Private Debt as the main investment opportunity within the alternative assets universe.

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