Bloomberg Talks: Margie Patel Talks Stocks in 2026

Date: December 31, 2025
Guest: Margie Patel, Allspring Global Investments
Host(s): Bloomberg Interview Team
Episode Theme:
Outlook for the U.S. and global stock markets in 2026, the continued dominance of key growth sectors, and the evolving landscape for high yield and private debt markets.

Main Theme & Purpose

Margie Patel, a seasoned portfolio manager at Allspring Global Investments, offers her forecasts for the 2026 stock market, examining which sectors will lead, global market dynamics, and the interplay between equities, bonds, and private credit. The conversation focuses on the durability of mega-cap tech leadership (“AI trade”), subdued prospects for market “broadening,” the role of energy, and why fixed income and private credit may lag equities next year.

Key Discussion Points & Insights

1. 2026 Market Leadership: Little Sign of Broadening

• Margie Patel predicts a lack of significant broadening in equity market performance next year; sector leadership is likely to remain unchanged.
  • “We do not expect the stock market to broaden out materially in 2026. We think the strong sectors will continue to have high growth.” (00:19, Host referencing Patel’s note)
• The U.S. remains fundamental stronghold, buoyed by new tax treatments, capital expenditure benefits, and overall economic resilience.
  • “The US still has some of the best fundamentals of any country in the world.” (00:52, Margie Patel)

2. Artificial Intelligence (AI) Trade Remains Dominant, Despite Some Rationalization

• AI stocks are still poised for above-average growth, even as valuations begin to normalize.
  • “The artificial intelligence trade is going to continue, but…we’ve already seen some erosion in the price-earnings ratios….Still that says to me that’s going to be one of the sectors that have well above average growth…So we still think that’s a great sector.” (01:36, Margie Patel)

3. S&P “Broadening” and Mag 7 vs. S&P 493

• Questions remain about whether sectors outside of the mega-cap tech leaders (Mag 7) can close the performance gap.
  • “Does that change in 2026?” (02:02, Host 2)
• Margie emphasizes Tech, Industrials (especially related to the electrical grid), Aerospace, and Defense as the continuing standouts.
  • “The same sectors that have been strong…are going to continue to be strong. The other sectors…may be rather disappointing.” (02:24, Margie Patel)

4. Energy Sector Nuances: Gas to Outperform Oil

• The explosive demand for power, particularly for data centers, supports gas more than oil.
  • “Growth in power…is going to come from the gas side…that sector [gas] very strong and really detached from what happens to the price of oil.” (03:17, Margie Patel)
• Oil may stage a surprise recovery in the medium term due to underinvestment.

5. Old vs. “Real World” Economy: The Endurance of U.S. Fundamentals

• U.S. is expected to post 2-3% growth in 2026, near the top end globally.
  • “In the US it looks like we're on track to say 2 or maybe 3% next year, which would really put us near the high end of the range of sustainable growth around the world.” (04:15, Margie Patel)
• Emerging markets have rallied, but lack the long-term underpinnings for sustained leadership.

6. Fixed Income Outlook: High Yield Bonds Offer Modest Appeal

• Bond market returns will be moderate at best.
  • “Bond market is…very small risk and very moderate returns.” (05:04, Margie Patel)
• High yield bonds are relatively safe, with low default rates—riskier issues have moved to private credit.
  • “US public high yield market has a default rate only about 2%...The defaults have been more on the private credit side which are more than twice that amount.” (05:04, Margie Patel)
• No opportunity for traditional capital appreciation with most bonds trading above par.

7. Disconnect: Falling Defaults Amid Rising Bankruptcies

• Improved credit quality in public high yield due to junkier issuers shifting to the private loan market.

  • “You just don’t have those very vulnerable names.” (06:22, Margie Patel)

• Many high yield companies refinanced during the zero-rate era, now have notably strong balance sheets.

  • Notable Quote:
    “Actually the high yield bond market as a whole has never had such a strong balance sheet overall.” (06:54, Margie Patel)

8. Private Credit's Growing Risk

• Private credit market now eclipses high yield in size and risk.

  • “It’s really a case of that’s where all the marginal dollars have flowed to and so that will be where the…risk will be.” (07:58, Margie Patel)

• Poor performance and bankruptcies in private credit haven’t spilled over to public markets yet, thanks to improved credit discipline.

  • Notable Quote:
    “When there are bankruptcies or blow ups in that market, it really hasn't washed over into the bank sector, hasn't washed over into the high yield market with spreads widening out because the market has distinguished those companies that are under pressure, got way too much money from the high yield.” (08:22, Margie Patel)

Notable Quotes & Memorable Moments

• On Market Leadership:
  “The same sectors that have been strong…are going to continue to be strong.” (02:24, Margie Patel)
• On Fixed Income vs. Equities:
  “Bond market is…very small risk and very moderate returns.” (05:04, Margie Patel)
• On Private Credit:
  “That market is now larger than the US high yield market. It’s more than doubled in the last five years.” (08:04, Margie Patel)
• On U.S. Macro Strength:
  “The US still has some of the best fundamentals of any country in the world.” (00:52, Margie Patel)
• On Energy Demands:
  “The need for more power, it’s really the only realistic source is going to make that sector very strong and really detached from what happens to the price of oil.” (03:17, Margie Patel)

Important Segment Timestamps

| Timestamp | Segment/Topic | |------------|----------------------------------------------------------| | 00:19 | Margie Patel joins & sets tone: no broadening in 2026 | | 00:52 | U.S. fundamentals & tax policy benefits | | 01:36 | AI trade: still strong though PE multiples moderating | | 02:24 | Leading sectors: Technology, Industrials, Aerospace | | 03:17 | Energy: Gas demand for data centers, oil underinvestment | | 04:15 | U.S. growth vs. emerging markets | | 05:04 | Bonds: high yield returns, safety, lack of upside | | 06:22 | Defaults: why low despite rising bankruptcies | | 07:58 | Private credit risks & growth | | 09:19 | Conclusion & thanks |

Tone and Takeaway

Margie Patel is measured but assertive: investors should expect continuity, not a revolution, in sector leadership for 2026. Opportunity remains concentrated in U.S. companies and specific sectors—technology, energy (especially gas), and industrials—without much promise for laggards or a dramatic catch-up from the “rest.” Fixed income is safe but uninspiring, while private credit’s rapid ascent brings isolated risk rather than systemic danger. The discussion is grounded, realistic, and favors disciplined optimism over hype.