Manulife: Global Market Growth to Become More Uneven in Second Half

Manulife Investment Management assesses that global market growth will become increasingly uneven in the second half of 2026 amid macroeconomic uncertainty. Senior Global Macro Strategist at Manulife, Yuting Shao, stated in a report that global macroeconomic conditions remain influenced by protracted global supply chain disruptions and high commodity prices. On the other hand, the normalisation process in the energy sector and goods distribution is still overshadowed by uncertainty. The prolonged conflict in the Middle East has altered the policy direction of central banks in various countries. According to Shao, expectations for monetary easing, previously anticipated to occur broadly and simultaneously, have now begun to shift. Persistent energy cost pressures are forcing several central banks to maintain a hawkish stance to anticipate further impacts on inflation. “At the same time, the global economic cycle is still moving unevenly. Countries with strong domestic energy resilience, or those directly propelled by major technology trends, have proven far more resilient,” said Yuting. He added that China has managed to mitigate the worst effects of the global oil price surge through a combination of energy import diversification, domestic price controls, and adequate energy reserves. “Supported by solid underlying growth, policymakers have the flexibility to respond dynamically should external conditions deteriorate,” he said. Global Head of Multi-Asset Solutions, Luke Browne, assessed that the increasingly uneven macro conditions reinforce the importance of selective and diversified asset allocation strategies. He noted that a still-strong labour market means significant monetary easing will not occur in the near term, so investors need to be more astute in determining investment allocations. “With labour markets remaining strong and delaying significant monetary easing, we maintain a highly selective approach to asset allocation,” he said. Luke assessed that although markets are still supported by resilient corporate earnings performance and stable economic growth, investment risks and opportunities are now increasingly different across regions and asset classes. “While markets remain supported by resilient earnings performance and stable growth, risks and opportunities are becoming increasingly uneven across regions and asset classes. This underscores the importance of diversification and active investment management,” he stated. He expects stock market leadership to broaden, no longer solely supported by large-capitalisation technology and artificial intelligence (AI) stocks, but also by high-quality assets with attractive valuations. According to him, a balanced multi-asset strategy will be key to navigating geopolitical and valuation volatility, while selectively capturing investment opportunities in global markets, as Asia continues to benefit from structural growth and AI-related investment themes. “We also see support for certain real assets, including commodities linked to AI infrastructure development, as well as opportunities in credit instruments that still offer attractive yields. At the same time, we favour short-duration bonds to help manage interest rate risk,” said Browne.