Jeff Blazek, co-CIO of multi-asset investments at Neuberger Berman, made an insightful appearance on a recent episode of Taking Stock, where he shared his perspectives on market trends and economic forecasts. With the backdrop of the New York Stock Exchange displaying all-time highs, Blazek discussed various factors affecting the financial landscape as we approach a new year.
During the conversation, Blazek highlighted a notable recovery from previous market lows, revealing a nearly 20% gain on the S&P 500 this year. Despite some concerns over lower trading volumes, he remains optimistic about the potential for continued robust investor gains through to 2026. He estimates a run rate for U.S. stock earnings to be around 10 to 12%, suggesting that low double-digit returns for the S&P 500 are within reach as we transition into the new year.
As Christmas approaches, Blazek anticipates the traditional Santa Claus rally, which encompasses a trading trend during the last five days of the current year and the first two days of the next. His confidence in seasonal patterns maintaining their historical performance signals an optimistic outlook for year-end trading. He also mentioned a significant fiscal stimulus that is expected to benefit American taxpayers, as they might see additional deductions and advantages from new tax laws totaling approximately $800 to $1000 per household.
Given the recently reported GDP growth of 4.3%, well above expectations, Blazek urged caution regarding the reliability of government data, highlighting the need for careful data interpretation in the wake of recent tariff noise subsiding. As for the Federal Open Market Committee (FOMC), he believes in a data-dependent approach, emphasizing the balance between employment and inflation in shaping monetary policy. He predicts one more rate cut may follow if job market contractions require adjustments from the Fed.
Amidst his insights on the economy, Blazek also drew attention to the significant impact of artificial intelligence on market dynamics. He foresees AI as a major game changer that will create new winners and losers across various sectors, beyond just technology companies. This megatrend in AI adoption will be crucial to monitor as it unfolds through 2026, influencing investment strategies and the overall economic outlook.
In summary, Jeff Blazek’s conversation underscores key financial themes, including optimism about the U.S. market’s trajectory, the influence of fiscal policies, careful consideration of economic data trends, the role of artificial intelligence, and an anticipatory gaze towards potential disruptions in investment sectors. As the new year unfolds, these discussions will be pivotal for investors looking to navigate the complexities of an evolving landscape.
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