Economic Deck
In this quarterly review, Brian Collins, Chief Investment Officer at HUB Retirement & Private Wealth (HUB RPW), breaks down Q4 2025 performance and looks ahead to what 2026 may bring.
Key Highlights:
- Strong finish to 2025: U.S. and international equity markets posted positive returns, with non-U.S. developed and emerging markets outperforming the U.S. by more than 13%—benefiting from a weaker dollar and domestic stimulus.
- Economy in good shape: GDP readings show healthy growth, consumer spending remains strong, and unemployment—while ticking higher—stays below long-term averages.
- Interest rate outlook: The Fed’s three rate cuts in late 2025 moved short-term rates lower, but longer-term rates remain range-bound, signaling investor concerns about inflation and growing U.S. debt levels.
- Market volatility and recovery: After a 20%+ selloff leading up to Liberation Day amid tariff concerns, cooler heads prevailed and markets rallied—with small caps showing encouraging outperformance.
- 60/40 portfolios: Balanced investors enjoyed another solid year, with mid-teen returns continuing the recovery since 2022.
Looking Ahead to 2026: Brian explores the big questions on the horizon—will AI continue to dominate economic growth, can international markets sustain their momentum, what happens with Fed leadership and independence, and how will fiscal policy and geopolitical developments shape the year ahead?
AI Capex
In this video, Chris Wright-Madison, Senior Analyst of Investments at HUB RPW, examines what AI really means for the economy and investors right now.
Key Highlights:
- AI is driving spending, not efficiency—yet. While artificial intelligence is one of the most powerful technological shifts in decades, its current economic impact is showing up as a massive capital expenditure cycle rather than widespread productivity gains.
- A familiar pattern. Major tech shifts historically follow a predictable path: first comes heavy investment in infrastructure—data centers, chips, networking, and power—and only later do the broad productivity benefits appear in margins, wages, and GDP.
- Companies are spending before monetizing. Businesses are investing aggressively in AI compute and energy capacity, often before they’ve figured out how to turn the technology into profit.
- Productivity takes time. Real gains require more than powerful tools—they demand workflow redesign, organizational change, and employee adoption. Most firms are still in the experimentation phase.
- Earnings remain concentrated. That’s why profit strength is currently limited to a narrow group of AI-focused companies, rather than broad-based margin expansion across the economy.
The Bottom Line: AI is real and the investment is real—but the productivity payoff is still ahead. For now, this is a capital spending story, not a productivity story.
Jay Sanford, Director of Investment Strategy at HUB RPW, tackles one of the most common questions from advisors and clients: what will interest rates do in 2026? With so much uncertainty, he walks through both scenarios. Key Highlights: The Bottom Line: The risk-return profile for fixed income in 2026 looks pretty good—higher starting yields mean bonds are better positioned to weather rate volatility than they were heading into 2022. Cameron Cooke, EVP Investment Consulting at HUB RPW wraps up the series with a deep dive into what happened in international equity markets during the fourth quarter and full year 2025. Key Highlights: The Bottom Line: International and emerging markets outperformed the U.S. in 2025—helped by a weak dollar, but also driven by strong local market fundamentals and sector-specific tailwinds. Staying flexible, diversified, and focused on long-term goals remains key heading into Q1 2026. Fixed Income
International
Have questions about what this means for your strategy? Connect with your advisor or contact our team directly.
