1. The AI boom - and the productivity mirage
Artificial intelligence is changing everything from how we work to how we worry. Big companies are boasting about record profits, much of it thanks to automation and clever algorithms.
But the data tells a fuzzier story - productivity isn’t improving as fast as the hype suggests. While tech giants and AI engineers are laughing all the way to the bank, many white-collar workers are discovering their jobs weren’t as future-proof as they thought. The result: a booming stock market but growing questions about whether the boom can last.
2. Governments drowning in debt
After years of pandemic support, inflation fighting and ‘investing in the future’, most governments are running on fumes. Debt levels are sky-high and, as economies cool, investors are beginning to demand higher interest rates to lend to them. Central banks are caught in the middle - rescue the markets or protect their credibility? It’s a tough balancing act, and one that could make even the most cautious bond investor feel a little seasick.
3. The return of Trump - and political volatility
Across the Pacific, US politics is once again the world’s favourite reality show. A second Trump presidency brings promises of growth through infrastructure and defence spending - but also a heavy dose of unpredictability. Markets cheer the stimulus but worry about trade wars, deregulation and ballooning deficits. It’s boom-and-bust energy in equal measure, and global investors will be watching every tweet — or maybe “truth” - for hints of what comes next.
4. Gold’s golden hour
When confidence in paper money wobbles, gold starts to sparkle. Central banks are buying it by the tonne, and even digital versions - tokenised gold stored on blockchains - are gaining traction. With inflation fears simmering and global politics messy, the oldest safe haven in finance looks new again. For anyone feeling nervous about markets, a little glint of gold might be comforting.
5. Job losses and the fragile consumer
Automation has a funny way of creating new jobs while taking away old ones - but the timing rarely lines up. In 2026, layoffs are spreading through management and service sectors, and that’s denting consumer confidence. Governments are experimenting with income support schemes, but budgets are already stretched. The upshot? Households tighten their belts, spending slows, and even the housing market starts to cool. A fragile consumer makes for fragile growth.
6. The bubble within the boom
For all the worries, markets still look expensive. AI stocks and private credit are flashing signs of speculative fever. When confidence finally cracks - maybe through a big corporate stumble or a missed earnings forecast - prices could start to deflate quietly rather than crash dramatically. Think slow leak, not burst balloon. Still messy, though.
The bottom line: a decade of repricing
By the end of 2026, investors may feel like they’ve stepped into a new era - one where volatility, not growth, sets the tone. The easy-money days of the 2010s are long gone, replaced by tighter budgets, bigger politics and a world trying to balance innovation with inequality. It doesn’t mean opportunity disappears - it just means investors will need to think harder about what’s really worth paying for.
Information is current as at 5 January 2026. Pie Funds Management Limited (“Pie Funds”) is the issuer and manager of the funds in the Pie Funds Management Scheme and the Pie KiwiSaver Scheme (“Schemes”), the product disclosure statements of which can be found at www.piefunds.co.nz. Any advice is given by Pie Funds and is general only. Our advice relates only to the specific financial products mentioned and does not account for personal circumstances or financial goals. Please see a financial adviser for tailored advice. You may have to pay product or other fees, like brokerage, if you act on any advice. As manager of the Schemes, we receive fees determined by your balance and we benefit financially if you invest in our products. We manage this conflict of interest via an internal compliance framework designed to help us meet our duties to you. For information about how we can help you, our duties and complaint process and how disputes can be resolved, or to see our disclosure statement, please visit www.piefunds.co.nz. Please let us know if you would like a hard copy of this disclosure information.