JoAnne Feeney on S&P 500 Performance, AI Investments, and 2026 Market Outlook

Economic Strength and Consumer Resilience

• 💡 The US economy is showing immense strength, particularly driven by the high-end consumer and investments in areas like data center buildouts.
• 📈 Despite broad economic growth, many individuals are not experiencing these positive effects directly.
• 📊 The resilience of consumers through the holiday season and Q4 is seen as crucial for continued US GDP growth and corporate earnings.

AI as a Growth Engine and Market Rotation

• 🚀 Artificial intelligence is identified as a significant growth engine for the economy and investments, expected to continue for many years.
• 🧠 Clients are nervous about 2026, especially after the recent rotation out of big tech stocks, which has impacted confidence.
• 🧩 A sector shift has occurred, with some valuations pulled back while others recover, indicating a need for portfolio resilience.

Navigating 2026 Market Challenges

• ⚠️ Investors are advised to build portfolios with resilience, as challenges lie ahead for the US economy, including a low labor market turnover rate which can signal a slowdown.
• 📈 The full impact of tariffs and a growing fiscal deficit are expected to keep long-term interest rates higher, even with potential Fed rate cuts at the short end.
• 🎯 Advisors Capital focuses on building portfolios of 40-50 hand-selected stocks, a strategy expected to be even more important in 2026.

Market Performance and Investor Sentiment

• 📉 The S&P 500 has hovered near record highs, driven by a narrow tech-led advance, despite low trading volumes ahead of a holiday.
• 📊 Economic data, including strong GDP growth and declining consumer confidence, presents a mixed picture for the market.
• 💰 Money markets have reduced bets on Fed rate cuts in 2026, with a low probability of a reduction expected in January.