E61: Bullish with a Seatbelt: Risk Assets and Investment Themes for 2026
KEY TAKEAWAYS
- In 2026, Citi Research forecasts a resilient global economy benefiting from central bank stimulus. The U.S. S&P is projected to reach 7,700, driven by strong earnings growth mainly boosted from increased spending on Al.
- Base metals, particularly copper and aluminum, are expected to outperform precious metals due to cyclical recovery and the increasing demand from the Al sector, while also cautioning on the downside risk given credit markets & concerns on consumer health.
- With a constructive outlook on the S&P, Citi suggests hedging equity exposure via credit and is watching for opportunities in China, while 10-year rates are expected to be around 3.75% and will depend on future issuances in the market.
Rob Rowe, U.S. Regional Director of Research, sits down with Head of Research Lucy Baldwin to discuss investment themes for 2026. We see a reasonably resilient and growing economy for the year's first half, with central-bank stimulus coming through. But given the number of risks on the horizon, we also suggest some caution.
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Robert Rowe, U.S. Regional Director of Research
Rob Rowe is the Head of Citi Research’s Global Strategy & Macro Group (GSMG) as well as Head of Research for the Americas. GSMG unites all of Citi’s Economists with Fixed Income, FX, Equity and Commodities strategists to create a common team providing research on the world’s major economies and asset classes. Rob has been with Citi for 35 years in various capacities. He originally joined Smith Barney, Harris Upham & Company in 1989 working in investment banking, fixed income sales, and research. In addition to his overall responsibilities, he continues to provide portfolio strategy for select clients as part of his previous role overseeing the Global Bond Portfolio Analysis team.
Lucy Baldwin, Global Head of Research
Lucy Baldwin is a Managing Director and Global Head of Research at Citi. Lucy is responsible for managing Citi’s global independent research across all asset classes. Lucy joined Citigroup in April 2021 from Credit Suisse, where she was Global Head of Equity Sales. Prior to Credit Suisse Lucy was at Bank of America as Head of European Equity Sales (2015-2019), and at Goldman Sachs as a Director of European Equity Research and in a variety of research analyst roles (2006-2015). Lucy started her career at Cazenove as an equity research analyst covering the building materials sector.
