Ron Insana lays out the risks that could upend markets in 2026.
00:00 – Intro
00:08 – Key Takeaways for Investors
00:32 – Santa Claus Rally Outlook
01:57 – Looking Ahead to 2026
02:12 – Portfolio Positioning for 2026
03:11 – International Market Opportunities
04:10 – AI Investment Strategy
05:20 – IPO Market Outlook
05:52 – Biggest Risks to the Market
06:50 – Can the Market Still Move Higher?
08:47 – Final Advice for Investors
Transcript:
Caroline Woods
Joining me to wrap up the week, Ron Insana, CEO of Insana Information Partners, joins me at the desk. Ron, great to have you.
Ron Insana
Great to see you. Thanks for having me.
Caroline Woods
All right. So what do we need to take away from this week? What do investors actually need to care about right now?
Ron Insana
Well, I think they start to care about the data fog that we’re going through. I mean, we’ve got CPI or consumer price information that told us inflation was a little better than we thought, but the data were wildly incomplete because there was nothing. From October we got the unemployment report, which again, also to a certain extent was was somewhat incomplete and somewhat confusing.
Ron Insana
So we don’t know exactly where the economy is right now. We think the labor market is weakening. We don’t know whether inflation is actually coming down in a meaningful way. So I think those questions remain open as we move into the remainder of this year and into 2026. And then there are huge questions around the viability of all this I infrastructure spend and whether or not not only can it be maintained, but can it ultimately be financed, and will there be enough profitability among all these major companies in the tech sector to pay down the debt that they’re increasingly using to build out data centers by software and by chips?
Caroline Woods
So heading into year end, with some uncertainty still, although quite a bit of optimism today, we’re seeing some follow through from yesterday’s gains today. Do you think that we’re setting the stage for the Santa Claus rally to come next week?
Ron Insana
I don’t know. You know, I’m not a huge fan of some of those indicators. I mean, they come around because people are, you know, kind of squaring the books at the end of the year and they might mark up stuff that they already own to make the year end look better. So I think that’s, you know, to a certain extent, it’s it’s meaningful if you’re a trader.
Ron Insana
It’s not terribly meaningful if you’re an investor. There are reasons to think the market might go higher still. We’re probably betting that the Federal Reserve will cut interest rates again sometime early in 2026. That’s a benefit to the markets almost always. And so I think yeah I mean there’s there’s no reason to be wildly fearful at the moment.
Ron Insana
But but I also I’m looking ahead beyond the end of this year. I would I’m getting a little bit more cautious about 2026.
Caroline Woods
And what does that look like in terms of portfolio positioning? What would a cautious about 2026 portfolio look like?
Ron Insana
I mean, I am not a fan of diversification, but I think it’s beginning will become increasingly important over time. I’m not convinced that the US will be or continue to be the best place to be overweight. Your investments, I think, you know, there are questions around the independence of the fed, whether or not the next fed chair lowers interest rates for political rather than economic reasons.
Ron Insana
So far this year, overseas markets have wildly outperformed the United States, whether it’s developed markets in Europe, whether it’s Asia or whether it’s emerging market. Equity and debt markets in local currency terms. So they’ve all outperformed the United States in some cases by more than two times. So I think that deserves a look next year, particularly if the dollar were to weaken and rates were to come down and we start running into problems of either a weaker labor market or higher inflation.
Ron Insana
I think one has to kind of really relook at the balance in your portfolio to determine if you have enough exposure offshore.
Caroline Woods
So you think international will continue to outperform next year?
Ron Insana
I kind of do in specific instances. I mean, I’m not quite sure as sure about Europe next year as I was this year. They’re spending a lot on defense and infrastructure. They’re doing more of that than they have in quite a long time. Certain parts of Asia which report this year, like South Korea, was up close to 50, 60%.
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