2026 Investment Bible: A Comprehensive Look at the Full-Year Outlooks of 12 Top Foreign Banks Including Goldman Sachs and Morgan Stanley

Author: SOL I Can't Understand

This article, compiled over 26 hours using AI Lobster, summarizes the 2026 outlooks released by multiple foreign investment banks and asset management institutions. It outlines the outlooks for major asset classes, allocation logic for different regions, and economic data. In addition to traditional institutions such as Goldman Sachs, Morgan Stanley, JP Morgan, Merrill Lynch, Barclays Private Bank, UBS, HSBC, and Deutsche Bank, it also includes four new institutions (Macquarie, Standard Chartered, DBS, and BlackRock), allowing you to see the outlooks of 12 foreign institutions in one go.

I. Asset Allocation Recommendations

The asset recommendations from different investment banks vary considerably, and the assets they predict are also inconsistent. Some provide specific index levels, while others can only be understood through the wording. The descriptions of asset predictions are also more vague than last year, with many falling into the range of mild optimism/pessimism.

🟩Stock Market View

🟩 FICC Market Outlook

Overall, the views of foreign institutions

I am very bullish on: Gold > Japanese Yen > US Stocks

Neutral to optimistic: Chinese stocks = Emerging market stocks > Japanese stocks > European stocks > Renminbi

Neutral: Cryptocurrency > Euro

Bearish: 10-year US Treasury bonds > crude oil

The logic of gold

Positive factors

1. Central banks around the world are diversifying their asset reserves: Russian assets have been frozen, and global central banks have increased their gold holdings for four consecutive years due to concerns about financial sanctions, while the US dollar's share of foreign exchange reserves has fallen to 56%.

2. Risk Hedging Tools : With US national debt at approximately $36 trillion and an expansionary fiscal policy potentially leading to a devaluation of the US dollar, coupled with escalating geopolitical conflicts, gold is the best hedging tool.

3. Easing monetary policy and declining interest rates: Most central banks around the world have begun to ease monetary policy, which has reduced the yield on government bonds and lowered the opportunity cost of exchanging government bonds for gold.

These three positive factors are entirely consistent with last year's.

Negative factors

1. Non-interest-bearing assets with no carry returns for long-term holding: Fiscal expansion leads to persistently high inflation, and the US dollar interest rate may remain high, which is negative for gold with no carry returns.

2. Increased volatility reduces the cost-effectiveness of gold as an investment: Gold volatility has risen to its highest level in nearly three years, and the upside potential has been significantly released, resulting in a significant decrease in the risk/reward ratio of gold.

3. The safe-haven function may fail : Gold's safe-haven function does not always work during economic downturns.

The logic for crude oil

Positive factors

1. Increased geopolitical risks: Global geopolitical conflicts mainly revolve around oil-producing countries and regions, especially the blockade of oil shipping routes by Venezuela; local conflicts exist in the Strait of Hormuz and the Bab el-Mandeb Strait in the Middle East; secondary sanctions on Russian crude oil exports; and the potential reduction in crude oil supply.

2. OPEC+ may tighten supply: If crude oil prices continue to decline, there is a possibility that OPEC+ may suspend production increases in the first quarter.

Negative factors

1. Rising inventory and idle capacity: Even with moderate demand growth in 2026, WTI will still face pressure from ample supply, idle capacity, and rising inventory, with the market continuing to be oversupplied.

2. High production of US shale oil leads to a significant increase in exports: Record US oil production, coupled with Trump's policies that anticipate increased oil extraction, has prompted OPEC+ to increase production in order to maintain market share.

3. Geopolitical "normalization": A ceasefire in the Russia-Ukraine war, a slowdown in Middle East conflicts, and the lifting of sanctions against Venezuela will all increase global crude oil supply, thus negatively impacting oil prices.

II. Regional Economic Judgments and Logic

Forecasts of economic data for various regions:

The Logic of the Chinese Economy

Positive factors

• More "precise" policy support: Faced with growth and employment pressures, policies are more likely to adopt targeted fiscal and structural monetary tools to reduce tail risks and raise the lower limit of growth.

• The main theme of science and technology and advanced manufacturing is clear : With the start of the new five-year plan from 2026 to 2030, resource allocation is more inclined towards "innovation/technology independence/advanced manufacturing/green transformation", and the certainty of industrial policies is stronger than the certainty of macroeconomic cycles.

• Export and Global Market Share Resilience : Despite global growth uncertainty, China has maintained export resilience by relying on product competitiveness, supply chain integrity and market diversification.

• "Anti-involution/supply-side rebalancing" improves profitability : Under the pressure of capacity expansion and price wars, if governance promotes the optimization of competitive order, industry self-regulation and consolidation of leading companies, the profit margins and cash flow quality of some industries are expected to recover.

• Asset repricing potential: Under-allocation of overseas funds, valuation pullbacks, and increased policy certainty provide fertile ground for the repricing of equity assets; once macroeconomic signals stabilize, capital inflows may precede fundamentals.

• Domestic liquidity is ample : Domestic residents face limitations in alternative investment options, and the ample liquidity created by the banking system will support the capital market. Compared to last year, the logic of technological innovation, the 15th Five-Year Plan, and anti-involution has been added.

Negative factors

• External frictions and tariff risks remain high : restrictions and trade barriers in the high-tech field are recurring, and even if they ease in stages, policy uncertainty may still suppress risk appetite and willingness to spend capital.

• The lingering effects of the real estate market are slow, and the recovery of household balance sheets is progressing slowly : the recovery of housing price expectations and related chains (local finance, financial credit, durable goods consumption) will take time, and the elasticity of domestic demand is limited.

• Deflationary pressures persist : The combination of capacity expansion and weak demand may lead to persistent deflationary pressures and involutionary competition within industries, dragging down corporate profit margins and revenue expectations.

• Local fiscal constraints limit the overall stimulus : policies are more inclined to structural support rather than comprehensive leverage, infrastructure and investment rely more on policy-based finance, and marginal efficiency and sustainability are constrained.

• Population aging and employment expectations are long-term variables that are detrimental to consumption : the recovery of consumption depends more on the gradual improvement of income and employment.

Market sentiment and regulatory tail risks : If sentiment towards the technology/AI theme declines or regulation tightens again, it may trigger valuation volatility and a pullback in risk appetite.

Investment direction

• Technology and AI Industrialization : Focusing on technological self-reliance and productivity improvement, we pay attention to the AI ​​software and hardware ecosystem, cloud and data infrastructure, domestic semiconductor production, automation and robotics, as well as internet platforms and communications sectors with potential for profit improvement.

• Advanced manufacturing, clean energy and power systems : global market share increase and industrial upgrading, focusing on the electrification chain, renewable energy, energy storage, grid investment and high-end equipment.

• Healthcare and Biotechnology : The long-term demand driven by aging populations is certain. Focus on innovation capabilities, commercialization capabilities, and policy compatibility. It is suitable for selection with a structural allocation approach.

• High-dividend and high-cash-flow assets : In a low-inflation environment, stable cash flow, improved governance, and increased shareholder returns are beneficial to central and state-owned enterprises and non-financial high-dividend assets.

• In the context of anti-involution, the supply-demand balance is improving and industry consolidation is underway : Against the backdrop of overcapacity, instead of pursuing industry-wide beta, focus should be placed on leading companies with optimal cost curves, increasing market share, accelerated industry consolidation, and recovering profit margins; durable goods are more suitable for tactical allocation during policy windows. Compared to last year when foreign investors favored leading service and manufacturing companies and the internet sector, this year's focus is broader and more granular, demonstrating that foreign investors have increased their attention to Chinese assets and have developed a new understanding of them.

American economic logic

Positive factors

• AI capital expenditure and penetration are accelerating : Strong capital expenditure and accelerated AI popularization are expected to drive AI-related stocks to continue their upward trend; and there is long-term potential for AI revenue from end users to reach approximately $2 trillion annually.

• Expansionary fiscal policy boosts business confidence : With the midterm elections approaching, the policy focus may shift to "targeted tax cuts and deregulation," coupled with tax incentives from the Big Beauty Act, which will benefit business investment and expansion, and a rebound in capital expenditure.

• Loose monetary policy is conducive to improved financial conditions : the Federal Reserve is expected to cut interest rates three times by the end of 2026, coupled with the relaxation of banking regulations, which will support profitability and valuation.

• Business and household balance sheets remain resilient : consumer demand is expected to be supported by solid wage growth and the relatively healthy balance sheets of middle- and high-income groups.

• Historical experience of political cycles and risk premium declines : Midterm election years often present "good buying opportunities," with historical statistics showing that the S&P 500 rises by an average of about 13.5% in the 12 months following a midterm election.

• The AI-driven productivity narrative : The automation and productivity gains brought about by AI are believed to create more GDP with less labor, and that companies may reap most of the productivity dividend.

Compared to last year, there was less talk of "American exceptionalism" and more focus on the support brought by the dual easing of fiscal and monetary policies.

Negative factors

• Tariffs and policy uncertainty : Tariffs exert pressure on prices and exports, which may lead to a period of economic downturn; at the same time, policy uncertainty damages confidence and inhibits capital expenditure, and the inflationary impact of tariffs remains to be seen.

• Weakening labor market and structural transformation : The unemployment rate once rose to 4.4% and was accompanied by increased layoffs. The "cooling down of white-collar employment" may impact high-income consumption, a growth engine.

• K-shaped economic patterns indicate a divergence in consumption, with the economy becoming more reliant on affluent groups : weak spending by low-income earners leads to weaker-than-expected consumption and increased credit pressure, thereby dragging down the stock market and the economy.

• Housing and credit rift, risk of rising default rates : The housing market is "pending/continuously dragging down" the job market, with declining employment leading to rising mortgage default rates and suppressing risk appetite.

• Resurgence of inflation and debt constraints could push interest rates higher : the imbalance between rising costs of basic goods and services and moderate or stagnant real income; coupled with rising government debt and the risk of high inflation, could push up bond yields and suppress valuations.

• AI is expected to have very little "fault tolerance" : valuation and concentration are directly identified as core risks, and it is recommended to diversify into non-US stock giants; at the same time, it is pointed out that the technology narrative is prone to bubbles, and the market is extremely optimistic about the profit potential of AI, with almost no fault tolerance for risky assets.

• Tightened immigration policies lead to inflation : Tightened immigration policies put pressure on the labor supply, increasing the risk of a wage and price spiral.

Investment direction

• Artificial Intelligence and Technology Theme : Focusing on AI (computing power/software/applications) and leading US technology companies, while also paying attention to "AI builders" and long-term commercialization potential.

• Power grid and utilities (structural opportunities for accelerated electricity demand) : the "infrastructure + power system" chain including grid modernization, power management, electrical equipment, energy storage, and water resource management.

• Healthcare : Healthcare has been repeatedly listed as an investment opportunity area, which can cover pharmaceuticals and specific sub-sectors.

• Financial sector : Regulatory easing has boosted financial activity and the outlook for net interest income is positive.

• Infrastructure and Resources (“Electrification/Energy Systems” Spillover) : Infrastructure configuration and resources; also pay attention to natural gas and renewable energy companies, as well as companies closely related to copper, rare earths, etc.

Eurozone economic logic

Positive factors

German fiscal stimulus : Germany's fiscal expansion and increased investment provide clearer pro-cyclical support for the Eurozone; infrastructure and climate transition-related investments improve business orders and confidence.

Monetary policy easing transmission and credit cycle repair : Under the transmission of interest rate cuts and loose financial conditions, credit standards tend to be more relaxed and corporate financing costs decrease, which helps stabilize investment and demand for durable goods and promotes the economy to evolve from a "weak recovery" to a "more balanced recovery".

The profit cycle is recovering, shifting from stagnation to moderate acceleration : With cost control, marginal improvement in demand, and easing of financial conditions, corporate profit growth has room to rebound.

Significant valuation discount : European stocks are trading at a discount relative to US stocks and similar global assets. Coupled with the spillover of global technology/AI sentiment, the market is more prone to a "positive correction starting from low expectations." Negative factors .

High savings rate suppresses consumption recovery : Residents' willingness to consume remains cautious, resulting in a slower and less elastic recovery in domestic demand, and the economy is more dependent on external demand and policy stimulus.

Tariff uncertainty and a strong euro drag down profits : A strong euro will further erode exporters' profit margins and suppress the performance of cyclical sectors that rely heavily on external demand.

Political instability and policy implementation risks : Political uncertainty and fiscal disagreements in some member states may repeatedly disrupt market expectations; at the same time, even if there is fiscal space, slow implementation of investment projects will weaken the policy multiplier.

External dependence creates vulnerability : rising energy prices can quickly be transmitted to business costs and household disposable income, making the Eurozone more sensitive to external shocks.

Squeezing the manufacturing and technology supply chains : Price and market share pressures from global competitors (especially China) may suppress profit margins and investment intentions in European manufacturing (parts, equipment and some technology hardware).

Aging population, skills shortages, slow reform progress, and high debt : An aging population and skills shortages constrain supply-side growth; slow structural reform progress reduces long-term potential; and high-debt countries face greater fiscal vulnerability in a low-growth environment. Investment Directions

Finance and European Banks : The credit environment is improving, financing costs are falling, and valuations remain relatively low; at the same time, financial institutions are less sensitive to exchange rate shocks compared to export chains.

Industry and Defense : Defense spending and the tendency toward reindustrialization will support orders and capital expenditures, making it suitable to establish an industrial and defense supply chain with technological barriers, delivery capabilities, and long-term contracts.

Utilities and Infrastructure : Investments in energy security, grid upgrades and transformation will enhance the certainty of utility and infrastructure assets; this sector combines cash flow and defensive characteristics.

Technology and Software : The spillover effects of the global technology boom may bring opportunities, but there are significant differences within the European technology sector, so it is more important to focus on areas less affected by external competition.

Healthcare : Healthcare is relatively less affected by cycles, coupled with the aging trend.

III. Views on the opinions of foreign banks

The assessments were relatively conservative, and some predictions had already come true by the end of the year: Similar to last year, the predictions from foreign banks were basically a continuation of the market trend that year, with very few aggressive or reversal predictions. For example, the target levels for gold and the RMB appreciation were reached shortly after the outlook was released. However, this time we can see that non-US investment banks such as Barclays and Macquarie are able to clearly point out the risks of US stocks.

While generally optimistic about all assets, the outlook is more vague than last year : Given that the US, China, and Europe are all in a policy cycle of dual fiscal and monetary easing, there's a generally optimistic outlook for almost all assets, but specific targets are rarely given. There are many reasons for being bearish on the US economy, but these are rarely reflected directly in asset forecasts; they exist more as a long-term risk warning.

There has been an improved understanding of Chinese assets : Although China is the world's second-largest economy and Chinese assets still occupy a relatively small portion of the discussion, this year there has been a deeper discussion of the advantages of electricity in the AI ​​competition, as well as a lot of innovative technologies such as robotics, semiconductors, and pharmaceuticals. This reflects a shift in foreign investors' previous stereotype that China only has a large population and no advanced technology.

The Reading Value of Foreign Institutional Views : Recently, the RMB broke 7, and some self-media outlets cited last year's depreciation expectations from foreign investors, contradicting these institutions' predictions. However, if one could reread "A Comprehensive Look at Foreign Banks' 2025 Outlook," it becomes clear that foreign predictions are rarely accurate. Even the most aggressive gold price forecasts only reached $3,000, and no institution could estimate $4,500.

Foreign capital, which has a relatively low asset allocation in China, is expected to become one of the main incremental players driving the market in 2026. More importantly, it is necessary to understand the thinking and consensus expectations of overseas investors in order to find investment opportunities that exceed expectations and attract capital inflows.