2026 Market Outlook: Double-Digit EPS Growth Expected by Stephanie Link

Economic Outlook for 2026

• 📈 The economy is currently on solid footing, with encouraging data like a 9-week high in Federal Reserve loan growth and industrial metals at all-time highs.
• 💡 Global central bankers, including the Fed, are moving closer to the neutral rate, which is positive for future economic activity.
• 💰 A significant stimulus of $15 to $175 billion is expected to enter consumer and corporate hands, supporting continued capital expenditures.

Earnings Growth Projections

• 🎯 While some forecasts predict 16-17% earnings growth, a more realistic expectation is low double-digit growth for the upcoming year.
• 📊 Historically, an economy growing at 2.5-3% typically sees 10% earnings growth, a trend that is expected to continue.

Market Volatility and Risks

• ⚠️ Volatility is anticipated in the first half of the year due to potential events like the overturning of Trump tariffs, a government shutdown, and the controversial confirmation of a new Fed chair.
• 📉 Market participants may be underestimating macro risks, including USMCA and the Federal Reserve's policy transition.
• ⚠️ Corporations are expected to manage down expectations after a strong year, which could introduce volatility into the marketplace.
• 💰 Both equity and credit markets are currently priced expensively, making them susceptible to disruption.

Consumer Resilience and AI Impact

• 💬 The consumer has remained resilient, particularly the high-end segment, which has supported economic activity.
• 🚀 The AI infrastructure capex cycle is expected to continue driving GDP growth, contributing significantly to the economy.
• 🧠 Despite a "wall of worry," the speaker remains optimistic due to strong fundamentals and the potential for lower interest and gasoline prices.