①The year 2026 will once again be a 'noisy' one, with endless debates surrounding Trump tariffs, Federal Reserve interest rate cuts, an unstable job market, artificial intelligence (AI) bubbles, GPU depreciation schedules, and more; ②Based on the 'three major characteristics' of the 2025 market trend, the media has selected several 'most accurate prognosticators.'
Cailian Press reported on January 4 (edited by Huang Junzhi) that, similar to the recently concluded 2025, the year 2026 will once again be a 'noisy' one, with endless debates surrounding Trump tariffs, Federal Reserve interest rate cuts, an unstable job market, artificial intelligence (AI) bubbles, GPU depreciation schedules, and more.
Based on the 'three major characteristics' of the 2025 market trend—namely, the S&P 500 Index rising by 17%; the market rebounding after spiraling downward due to the 'Liberation Day' tariff; and gold prices surging over 60%—the media has named a few 'most accurate prognosticators.' In fact, while most Wall Street strategists were relatively optimistic about 2025, only a handful set target prices close to the actual level (6845.5 points).
Prioritize U.S. stocks
Manish Kabra, a strategist at Societe Generale, was one of them. He provided a year-end 2025 target price of 6750 points for the S&P 500 Index, as he believed that Trump's deregulation and low-tax policies would benefit U.S. economic growth.
Looking ahead to 2026, Kabra expects the S&P 500 Index to rise to 7300 points by year-end. He favors consumer cyclical stocks, financials, and industrials, believing these sectors will benefit from the 'big and beautiful' tax reform bill.
"My biggest recommendation, consistent with my view in 2025, is to prioritize buying U.S. stocks. This is about America’s reindustrialization and everything associated with it," he said.
Nicholas Colas, co-founder of DataTrek Research, provided a closer year-end 2025 target price of 6840 points, betting on the resilience of the U.S. economy. While he has not yet issued a target price for 2026, Colas noted that materials, real estate, and utilities sectors may outperform in the new year.
David Sekera, chief market strategist at Morningstar, and Ryan Detrick, chief market strategist at Carson Research, accurately timed the stock market rebound following the 'Liberation Day Tariff.'
Focus on AI applications
Looking ahead to 2026, Sekera stated that attention should be focused on companies 'benefiting from artificial intelligence' rather than 'artificial intelligence builders.' He noted, '2026 may be the year when the market begins to shift its focus more from artificial intelligence hardware companies to those capable of driving revenue growth and leveraging artificial intelligence within their own products and services to enhance efficiency.'
It is evident that this year he is more focused on the application side of AI. Some of the companies he listed include Clorox, Mondelez International, ServiceNow, and The Kraft Heinz.
Detrick predicts that despite some softness in the labor market, economic performance in 2026 will exceed expectations, and he believes that the commodities boom is likely to continue.
"Overall, we like equities, yes. But we believe that adding some commodities investments relative to bonds – a strategy that worked very well in 2025 – can continue into 2026," he added.
Focus on Gold Allocation
The final "prophet" is Jeffrey Gundlach, CEO of DoubleLine Capital, also known as the 'New Bond King,' who successfully predicted gold's surge. After a 27% increase in gold prices in 2024, an additional rise of over 60% seemed unlikely, but it happened as he forecasted.
Most Wall Street strategists set the upper limit for their 2025 gold price forecasts at around $3,000 per ounce, gradually raising their targets throughout the year. However, Gundlach outpaced his peers from the start. As early as March, he predicted that gold prices would surpass $4,000 per ounce, and as investors became increasingly concerned about the depreciation of fiat currencies due to growing government debt, he continually reinforced his prediction throughout the year.
"I think people view gold as an asset class due to concerns over current geopolitical turmoil, including tariffs and various other factors, along with the massive scale of debt, prompting reflections on how we will address these issues," he said in an interview last May. "Thus, gold is somewhat of a true monetary asset."
Looking ahead, Gundlach's previously recommended portfolio includes 20% cash, 25% bonds, 10-15% 'tangible assets' (such as gold), and 40% international equities.
Editor/Liam