PPM America -Mon, 12/22/2025 - 14:20

2026 Outlook: Staying Grounded in a Shifting Landscape

US economic resilience has been a multi-year theme, including 2025 when the economy kept growing amid the largest tariff implementation since the 1930s. Growth has aided corporate profitability, and that strong fundamental backdrop has buoyed markets, with equities trading around all-time highs and corporate bonds experiencing historically tight spread levels.

Strong fundamentals are expected by the market in 2026, driven by consumer spending and AI investments. Market participants can't help but opine on the multi-year outlook for AI and its potential ramifications for productivity, the workplace and our daily lives. However, while we don't lose sight of the long-term at PPM, our bottom-up focus behooves us to acknowledge already rich valuations and that 2026 could bring headwinds to market technicals.

AI firms will likely issue in public investment grade, private investment grade, high yield, bank loan and private equity, with implications for other asset classes such as emerging market debt. Add in uncertainty around tariffs, the changing makeup of the Federal Reserve and still sticky inflation, and we believe investors will benefit from a fundamental, research-focused approach. This environment should provide attractive investment opportunities but with the potential for increased risk that will require managers to remain disciplined and tactical.

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Contacts

PPM America

Established in Chicago in 1990, PPM America, Inc. (PPM) is a US-based institutional asset manager with $90.09 billion in assets under management as of September 30, 2025 (1).

Originally founded as a captive asset manager for a global insurance company, we now oversee more than $69 billion on behalf of insurers globally. PPM exists to consistently support our clients in achieving their long-term value goals and has the experience and the expertise to support insurer’s unique and evolving needs across a range of investment solutions including public and private fixed income, real estate and private equity.

(1) AUM includes committed but unfunded capital for PPM’s private equity and commercial real estate businesses. AUM includes both securities issued by PPM CLO vehicles held by PPM separately managed account clients and the underlying collateral assets of the CLO vehicles managed by PPM.

Bob Meikleham
Managing Director, Global Client Group, Insurance
bob.meikleham@ppmamerica.com
312-843-5929

https://www.ppmamerica.com/

225 West Wacker Drive, Suite 1200
Chicago, IL 60606

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