Expect fundamentals to be back in the driver's seat in 2026, says Emily Roland

Watch on YouTube ↗  |  January 12, 2026 at 12:02  |  5:59  |  CNBC
Speakers
Emily Roland — Co-Chief Investment Strategist, John Hancock

Summary

Emily Roland, co-chief investment strategist at Manulife John Hancock Investment Management, expects U.S. earnings growth and fundamentals to drive markets in 2026, though multiple expansion may be limited. She favors U.S. equities, quality companies, technology, industrials, health care, utilities as an AI play, mid caps, and international diversification, while avoiding small caps. She also sees value in bonds as inflation pressures ease and yields potentially move lower.

  • Expects U.S. earnings engine to remain strong with lower rates, tax cuts, weaker dollar, and falling oil as tailwinds.
  • Sees fundamentals returning to the driver's seat in 2026, favoring quality at reasonable prices and active management.
  • Remains overweight technology but wants to diversify; favorite cyclical sector is industrials.
  • Finds value in health care and adds utilities as an AI play.
  • Prefers mid caps over small caps; sees mid caps at a 30% discount to large caps.
  • Would hold some international equities for currency diversification as dollar loses risk-off appeal.
  • Sees value in bonds; expects inflation not to be a major Fed issue and yields can move lower.
Ideas
Emily Roland Co-Chief Investment Strategist, John Hancock 0:45
U.S. earnings engine drives equities higher.
The U.S. earnings engine remains the most powerful globally, supported by expected 8% earnings growth, lower rates, lower taxes from the One Big Beautiful Bill, a weaker dollar, and falling oil prices. While multiples may not expand much, earnings should drive U.S. equities higher.
SPY HIGH
Emily Roland Co-Chief Investment Strategist, John Hancock 2:29
Favor quality companies at reasonable prices.
As fundamentals return to the driver's seat in 2026, investors should focus on quality companies at reasonable prices, especially those benefiting from productivity enhancements and managing margins well. Active management will be critical.
QUAL MED
Emily Roland Co-Chief Investment Strategist, John Hancock 3:05
Still overweight tech on strong earnings.
She remains overweight technology because it is expected to see 28% earnings growth this year after 25% last year, though it is already 34% of the index and an asset allocator favorite, so she wants to diversify away from it.
XLK HIGH
Emily Roland Co-Chief Investment Strategist, John Hancock 3:28
Industrials benefit from U.S. capex boom.
Industrials is her favorite cyclical sector because major capex initiatives are pervading the U.S., helped by the One Big Beautiful Bill. Mid-cap industrials can be a big beneficiary as capex spending broadens.
XLI Mid-cap industrials HIGH
Emily Roland Co-Chief Investment Strategist, John Hancock 3:45
Health care offers value opportunities.
She is finding value in health care and includes it as a sector where valuation opportunities exist as market breadth broadens beyond tech.
XLV MED
Emily Roland Co-Chief Investment Strategist, John Hancock 3:47
Utilities are an AI play.
She is adding a small amount of utilities as an AI play, suggesting exposure to power demand tied to AI buildout.
UTILITIES MED
Emily Roland Co-Chief Investment Strategist, John Hancock 3:55
Avoid small caps due to lower quality.
She would not go all the way down to small caps because there is lower quality there, even as she expects more market breadth.
IWM MED
Emily Roland Co-Chief Investment Strategist, John Hancock 4:00
Mid caps attractive at 30% discount.
She sees opportunity in mid caps, which trade at about a 30% discount to large caps, and prefers them over small caps because small caps have lower quality.
Mid-cap equities HIGH
Emily Roland Co-Chief Investment Strategist, John Hancock 4:06
International equities provide currency diversification.
She would hold some international positions because the dollar has lost its risk-off appeal and the euro has become a destination for capital, helping non-U.S. equities. While international earnings prospects are weaker than the U.S., they offer currency diversification.
ACWX MED
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This CNBC video, published January 12, 2026, features Emily Roland discussing SPY, QUAL, XLK, XLI, Mid-cap industrials, XLV, UTILITIES, IWM, Mid-cap equities, ACWX. 9 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Emily Roland  · Tickers: SPY, QUAL, XLK, XLI, Mid-cap industrials, XLV, UTILITIES, IWM, Mid-cap equities, ACWX