According to the latest Natixis Investment Managers Strategist Survey 2026, 91% of market strategists believe artificial intelligence will be the key factor driving market performance in the second half of 2026. The survey of 33 experts across Natixis' affiliated group reveals that 88% expect AI productivity gains to translate into higher corporate profits, with only 12% believing the AI bubble will burst in the second half of the year. This optimism comes despite 79% of strategists acknowledging that AI volatility driven by fears is here to stay and could potentially spread across multiple industries. The survey also shows that 97% of strategists believe AI will provide second and third order gains as the technology becomes more widely adopted and deeply embedded within businesses.
According to Investing.com India's market analysis, investors face a complex environment where multiple headwinds are emerging while a dominant tailwind continues to support market performance. The analysis emphasizes that market forecasting shares more similarities with hurricane forecasting than most investors realize, requiring understanding of multiple forces acting simultaneously rather than relying on single outcome predictions. As per the analysis, the goal when managing an investment portfolio is not to predict a single outcome but to understand the environment well enough to establish a range of possible outcomes, similar to meteorologists who draw a "cone of uncertainty" containing dozens of possible paths for storm development.
Michael Howell's Global Liquidity Index (GLI) reveals concerning trends for market conditions. As reported by Investing.com India, the cycle is now pointing down into 2027, with Howell projecting $40 trillion in global debt rollovers by 2027, representing a $4 trillion increase from the previous year. The analysis indicates that liquidity contraction creates a mismatch between refinancing demand and tightening financial conditions, historically favoring cash, long-duration government bonds, and gold over risk assets during declining liquidity phases. Howell's index and the sine wave show the liquidity cycle peaked in mid-2025 and has been declining since, with the next trough not expected until 2027.
According to the Natixis survey, 61% of strategists expect technology to be the top performing sector in both the US and Asia, with Europe showing more balanced preferences where financials led at 27%, followed by defense at 24% and technology at 18%. Infrastructure emerges as the clear favorite in Europe with 30% expecting it to deliver the strongest returns. The survey also reveals that 67% of strategists expect US equities to outperform in H2 2026, with 42% identifying US markets as likely to deliver the best returns globally. Natixis strategists favor a 60:20:20 alternatives diversified portfolio over traditional 60:40 allocations, with 67% believing this approach will outperform in the second half of the year.
Despite AI optimism, investors face significant headwinds from geopolitical uncertainties and economic challenges. The US-Iran conflict continues to pose risks, with 70% of strategists warning of potential escalation in the second half of 2026. Inflation remains persistent, driven by energy costs, with 97% of strategists ranking inflation among the top risks in H2 2026. However, the survey shows some positive developments, with 55% of strategists saying concerns about private credit have been overstated, and 52% believing private credit opportunities look better in Europe than in the US. Natixis strategists are less worried about recession risks this year, with only 3% rating it high compared to 62% who rated recession as a medium or high risk in last year's survey.
