Ken Fisher’s 2026 Mid-Year Market Update

Transcript

Ken Fisher:

So every year at the beginning of the year, we provide a forecast of what we at Fisher Investments think the year will mostly look like, and inherently, as the year progresses, people wonder, how is that working out?

And this year is working out pretty well, not perfectly. The year is a little stronger in the first half of the year than we thought it would be. Our forecast called for a back and forth, sort of not too strong first half of the year, with strength building in the back of the year and particularly in the fourth quarter. The market's up about 9% as I speak, and that's true for both the United States and the non-United States.

So it was also part of our forecast that there's this feature that I've used for years and years, that no one ever really believes but it always works, that the back quarter and of the midterm election year in the first couple of quarters of the third year tend to be quite strong as we get over, if you will, the election and see that the midterm elections tend to provide us absolute or relative increase gridlock. That feature, this year, may have accelerated somewhat earlier into the year than normal because there's very little getting through Congress and Congress is acting pretty darn gridlocked anyway. So in that, it may be that there's more in the earlier part of the year, maybe a little bit less in the back part of the year, that remains to be seen.

A part of the year that isn't quite as we forecasted it is the degree to which AI-related tech is so very strong compared to the market. Now I want to take you back to something I said earlier and try to put that into perspective. The tech world in aggregate, on average, is doing about 4% better year- to-date than the US as a whole, which includes the tech part as its biggest weight. So what that's telling you in a different way is that since that's doing almost identically, the US as a whole, almost identically, as well as the non-US world overall, which has almost no tech in it, very little tech, that's telling you that the non-tech US world is actually lagging the overseas world.

And that lag is a little surprising because it's the value stock world in the US versus everything outside of the US, which is predominantly value. And so you've got the tech part doing super well in America with the non-tech part lagging counterparts overseas. We'd envisioned that the non-US part of the world would be stronger than it is, but this split between value in the US and value outside of the US may account for part of that.

Otherwise, of course, we did not forecast the Iran war. Interest rates have been relatively stable, which is what we said would have happened. We didn't forecast that the Eurobank would make a hike in the spring, but it's not the biggest deal in the world.

So mostly it's gone along about as we expected it to, maybe a little bit better. Some things a little bit better, some things a little bit worse. That's not a very shocking year.

Thank you very much for listening, I hope you found this useful. I'll chime in later on the year, how the year is progressing again versus our beginning forecast for the year, but so far it's not too far off.

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