Capital & Context Podcast Ep 2: Navigating the Complex US Equity Market in 2026

Описание: Welcome to episode two of the Capital and Context podcast with Mark Insley and Sam Hallett. This week, the hosts discuss US equities.

Key Topics:

US Equities Overview: The US equity market is the largest in the world, making up over 40% of a worldwide index of equities. It includes traditional industrial companies like General Motors and Ford, older tech firms like Nvidia, major companies like Microsoft and Apple, and small-cap companies.

Market Complexity and Valuation: The US market is complex due to factors like tariffs and politics. Tariffs impacted global industries, such as the US automotive sector. On a short-term basis (forward or backward-looking 12 months on multiples of earnings), the S&P 500 appears expensive. However, on a cyclically adjusted basis, things look "okay". When moving out of the "Magnificent 7" (big AI names like Nvidia), the median S&P 500 stock is trading at fair value.

US Small-Cap Strategy: The hosts use passive funds for US large-cap holdings, as the large-cap space is considered "priced to perfection". For the US smaller-cap space (e.g., the Russell 2500 index), active management is preferred. Only about 10% of that index generates positive earnings, making quality focus essential. They use the T. Rowe Price Smaller Companies fund to concentrate on good-quality companies that are producing good income and still have room to grow.

Currency Hedging: The portfolios are currently 20% cable hedged in US equities. The vast majority of the hosts' peers do not hedge US equities.

Policy Backdrop for 2026: Tariff risk is real, and increasing tariffs are generally good for domestic producers. The US midterm elections at the end of the year will also play a role. The US economy is being propelled by AI spending. Overall, 2026 is lined up to be a decent year.

Don't forget to like and subscribe for more market insights! The next episode will focus on credit.