If you consume any financial media, then you know the narrative is overwhelmingly negative. War. Energy shocks. Political dysfunction. Continued tariffs. Fragile consumers. Slowing growth. Housing. You name it.
What is far less discussed, and in many cases almost entirely ignored, are the underlying positives that continue to support markets quietly. That gap between perception and reality is what matters and often is where opportunity lives.
To understand these positives, let’s look at several tailwinds that deserve more attention.
One of the more important forward-looking indicators in markets is the yield curve. It doesn’t always generate headlines, but it should. Today, the yield curve in many countries is upward-sloping and has been steepening. That matters because it directly influences lending behavior. Remember, banks borrow short and lend long. When that spread widens, lending becomes more profitable. When lending becomes more profitable, lending tends to increase.
More lending means more capital flowing into the economy, into businesses, into investments, into consumption. That’s not theoretical, it’s practical. We are already seeing positive loan trends. This is not the backdrop of an economy rolling over. It is the backdrop of one that continues to expand.
Another underappreciated development is regulatory drift, particularly in the US banking system. Over the past decade, US capital requirements have steadily increased in response to post-2008 reforms. That pendulum now might be swinging back, even if only marginally. Current proposed adjustments to capital rules could allow banks to deploy more of their balance sheets into lending. The estimates might differ, but the direction is clear: incremental easing creates capacity, which supports credit formation and, in turn, growth. This is rarely the type of change that drives immediate market reaction. It is gradual, cumulative, and easy to overlook. But it is directionally positive.
Additionally, corporate fundamentals remain stronger than the media’s prevailing narrative suggests. Earnings growth has been driven by increasing revenues, not cost-cutting. That distinction matters. Cost discipline can only go so far. Revenue growth reflects demand.
Notably, forward expectations have not declined despite recent headlines; some have even been revised modestly higher. This runs counter to the dominant story that external shocks are about to derail profitability. Companies are not behaving as though they are entering a downturn.
We all understand that economic data rarely moves in a straight line, and that is especially true now. Labor markets are uneven month to month. GDP prints vary depending on trade flows. This inconsistency is often interpreted as weakness.
A better view is that economic expansion continues, just without the synchronized growth that headlines favor. To see past it, strip out distortions and look at core components, consumer spending, business investment, and real estate investment, you will see reasonably steady, moderate growth. Not booming. Not contracting. Just continuing.
Globally, the same pattern holds. Growth persists across developed economies, with most purchasing manager indexes still indicating expansion. This matters because markets don’t move based on what is widely known and anticipated. Markets move on the gap between expectation and reality, and right now, expectations are being shaped by highly visible risks and constant negative reinforcement. Meanwhile, reality is more stable than most assume.
That disconnect is important because it doesn’t mean volatility disappears or that risks aren’t real. It means that a large portion of the market is focused on what could go wrong while underweighting what is already doing fine.
Historically, that is a positive, fruitful setup. Markets don’t need perfect conditions to move higher; they need conditions that are better than most expect, and 2026 is continuing to look like a good year for markets.
Today, expectations remain dour while fundamentals remain reasonable, creating a meaningful gap between perception and reality. That is where returns are made. If that gap starts closing, 2026 could be a lot stronger a year than even I anticipate.
