Core Viewpoint - Hartnett predicts that going long on commodities will be the best trade in 2026, driven by a shift in economic policy from "monetary easing + fiscal tightening" to "fiscal easing + de-globalization" post-pandemic [3][4][6] Group 1: Commodity Market Outlook - The report emphasizes that the transition in global economic policy creates structural opportunities for commodities, which are expected to outperform bonds in the 2020s due to inflationary growth and populism [4][6] - Hartnett highlights that oil and energy sectors, long overlooked by the market, represent the best contrarian investment opportunity for 2026 [9] - The report notes that natural resources, metals, and Latin American stock markets have shown technical breakthroughs, with the latter up 56% year-to-date [7] Group 2: Bond Market Analysis - Despite the positive outlook for commodities, Hartnett expresses caution regarding the bond market, indicating that it is under pressure from "hot" economic policies [10][18] - Historical data shows that U.S. Treasury yields typically rise following the nomination of a Federal Reserve Chair, with 2-year yields increasing by an average of 65 basis points and 10-year yields by 49 basis points within three months [13][14] - The report suggests that the current market threat is that any gains in the stock and credit markets may be concentrated in the first half of 2026, with potential long bond sell-offs if the Fed adopts a dovish stance [19] Group 3: Stock Market Opportunities - Hartnett identifies a complex and differentiated landscape in the stock market, where liquidity peaks correspond to credit spread lows, and AI capital expenditures are becoming a new regulatory force [20] - The report favors mid-cap stocks over spenders in the AI sector, anticipating government interventions to manage inflation and unemployment rates [22] - Specific sectors such as cyclical "Main Street" industries (homebuilders, retail, paper, transportation, REITs) are seen as having the best relative upside potential, supported by anticipated economic stimulus from the Trump administration [23]