Investec’s Q2 2026 Global Investment View, distilled from its cross border Global Investment Strategy Group, surveys a world unsettled by an oil shock and geopolitical strain.
The next 18 months may test investors’ nerve, with growth softening and inflation proving stubborn. Yet South Africa’s medium term story stands out: reform momentum and attractive valuations offer ballast beneath the surface. The icebergs are visible, but so too is a navigable course.
The global growth outlook
Global growth is still resilient. Inflation picked up in March to just over 3%, from 2% in February. As a result, cuts by major central banks have largely been ruled out. It will take some time to measure the impact of the war in Iran on global growth, but early signs suggest that global growth is proving resilient. For example, the Atlanta Fed GDPNow estimate for US GDP growth in the first quarter is at 1.2%. High frequency-based estimates of European GDP growth in the first quarter have recently increased to 0.2%. There are also few signs of AI-related capex slowing.
Earnings growth is strong. The US first quarter earnings season has got off to a strong start. The current expectation is that S&P 500 earnings growth this quarter will be above 14% year-on-year. The consensus forecast is that this will then accelerate to over 20% year-on-year over the coming quarters. Similarly, the consensus forecast is that Stoxx 600 earnings growth will accelerate from 3% year-on-year in the first quarter to +13% in the second. Such strong earnings growth provides a compelling reason to shift back to neutral.
Global Investment View
The Global Investment Strategy Group brings together the insights of Investec Wealth & Investment professionals in the UK, South Africa, and Switzerland, mapping their outlook, setting a risk budget, and identifying potential pitfalls that lie in the global investor's path.
The outlook for South Africa
South African risk assets have taken a knock since the start of the war. Even so, SA Inc is vulnerable to a further derating given the likely shock to fuel prices. As a result, the committee reduced the double overweight in SA Inc shares.
We estimate that the outlook for South African risk assets over the medium term is still good given continuing structural reform and attractive valuation, but the next few months could be volatile. The South African risk score was reduced from 1.5 to 1.
Download the Global Investment View for South Africa.
Markets will react to events beyond our influence, but by keeping cash and near-cash readily available, while staying invested, diversifying thoughtfully and managing risk, we can rest assured with the knowledge that we are positioned for the short, medium and long term.
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