2026 could be a year with strong fundamentals and sour sentiment: JPMorgan's Meera Pandit

• 2026 will be defined by tension between sour sentiment and fine fundamentals.
• S&P 500 earnings estimates have risen from 15% to 17% for the year, indicating strong underlying fundamentals.
• Markets are expected to see elevated volatility, particularly in single stocks, creating opportunities for stock picking.
• Investment focus includes the AI infrastructure layer (recipients of capital) and international markets like Korea, Taiwan, and Latin America for the AI supply chain.
• Hedge portfolios against risks you know, and diversify against risks you don't.

Meera Pandit of JPMorgan Asset Management discusses the market outlook for 2026, characterized by a tension between sour sentiment and fine fundamentals. She advises investors to hedge against known risks and diversify against unknown ones, highlighting opportunities in stock picking due to elevated single-stock volatility and long-term secular themes like AI infrastructure and international supply chains.