Kelly Kowalski, CFA

The financial narrative is evolving from asking how big the opportunity is to asking how sustainable the returns are.

Taken overall, the first quarter of 2026 underscored a transition away from broad, liquidity driven gains toward a more selective and risk aware environment.

While several supportive economic and market factors are in place as we enter 2026, the path ahead is unlikely to be smooth.

The markets weigh Fed policy recalibration, labor market ambiguity, resilient risk assets … and the impact of artificial intelligence.

Heading into the second half of the year, the U.S. economy is projected to grow at a modest pace, although recession risks remain elevated and the labor market remains a focal point.

A look ahead at opportunities and headwinds.

Despite inflation and monetary policy headwinds, 2024 topped consensus expectations. But as we enter 2025, several questions remain.

As we start on the final months of the year, we are on the cusp of resolving the most significant uncertainty that has affected the market in 2024.

As we enter the second half of the year, it appears the fundamental drivers of the economy have improved. But some concerns remain.

All appears well on the economic and corporate earnings front, but inflation and geopolitics remain areas of uncertainty.

If 2023 taught us to expect the unexpected, then will ideal market and economic conditions persist?

The economy has been much stronger-than-expected, but the debate over recession remains front and center.

Economic growth has been stronger-than-anticipated, but the trend remains one of slowing growth and fading tailwinds.

For financial markets, the first quarter of 2023 was marked by a rollercoaster of volatility, emotions, and sudden shifts in narrative.

The last year was disappointing and there are serious questions to ask about the coming one.

Amid inflation-driven rate hikes and market drops, there’s been nowhere to hide for investors.

Investors should pay close attention to fundamentals, particularly earnings and interest rates.

A recession likely isn’t imminent, but there are substantial risks to the downside.