No one expects a boom in Europê. However, banks seem convinced by the stability that Europe can offer. In all the analyzed publications, the German budget plan appears to be the main catalyst. However, the effects of this stimulus are not magical: growth in Germany, like that of France, is expected to be only modest in 2026. As Berlin plans to devote a fifth of its €500bn investment program next year, it is mainly the hope of seeing Europe's locomotive regain its status that fuels trust.

On the monetary front, all banks agree that the euro zone will hit its inflation target before the US, which could give the ECB more latitude than the Fed. Several of these banks emphasize disinflationary dynamics in Europe and anticipate a cut, or possibly several cuts, next year. A phenomenon partly due to Chinese goods pouring into Europe as US demand for those same products continues to decline. JPMorgan notes that the share of the United States in Chinese exports has fallen from 22% in 2017 to 12% today.

In short, Europe constitutes a constructive investment zone, ideal for diversification into assets valued lower. If political instability is comfortably settled across the continent, the rise in investments to secure strategic autonomy deserves close watching.

2035 target for China

The globe's second power is at the heart of shifts in global trade. Despite persistent trade tensions with the United States, its trade surplus remains historically high.

Government policies have targeted 5% growth this year. The four banks are more pessimistic for the years to come, with BNP Paribas leading as it expects growth below 4% in 2027.

Nevertheless, one must acknowledge China's resilience, which has identified new growth engines as its traditional pillars-real estate and massive exports-no longer meet Xi Jinping's ambitions, notably the goal to double GDP between 2020 and 2035. An anecdotal but necessary figure: to reach this objective, China would need an average annual growth of 4.17% over the coming decade.

Industrial innovations, artificial intelligence, and energy supremacy can certainly take over. Since last year, the digital economy generates more revenue than the real estate and construction sectors together: the baton has passed.

In the coming weeks, leaders will announce the policy guidelines for 2026. Then the government will publicly declare its annual growth target in March.

A fourth year of gains on Wall Street?

Should we expect a fourth year of growth for the American stockmarket? Time will tell. For now, the domestic economy remains robust, particularly thanks  to an American consumer optimism seen as unparalleled and enviable by the rest of the world. If the Treasury Secretary Howard Lutnick envisions GDP growth of above 4% next year, Barclays contemplates about 2%.

While the Fed would like to press both the button supporting the economy and that fighting inflation, the major banks expect a year of rate cuts with a new Fed chair in May. It would amount to continuing the cycle: an economy in need of a nudge but with inflation still elevated.

AI should remain the key growth driver for stockmarkets. And none of the four banks fears a bubble at this stage, although signs are emerging according to them. These institutions agree that high valuations worry them less than the market's concentration. Indeed, Goldman Sachs notes that seven stocks account for 40% of the S&P 500's capitalization.

The rapid adoption of AI with, for example, already 800 million weekly active users on ChatGPT and the still reasonable debt levels of tech companies ease the fears.

Whether in the European or American market, 2025 will have rewarded portfolio concentration at the expense of diversification. It was necessary to know what to focus on. Barclays rightly notes that such dynamics rarely endure.

https://www.marketscreener.com/news/overview-of-2026-prospects-published-by-the-largest-banks-ce7d51ddda8cf72c