Neuberger Berman’s Q2 2026 outlook remains cautiously optimistic, despite ongoing Middle East conflict impacting global growth and inflation. The report identifies attractive entry points in U.S. large caps and emerging markets due to valuation resets.
Compelling contrarian opportunities exist in short-duration bonds, as markets may be overestimating central bank tightening. The firm also advises increased attention to commodities and hedged strategies for tail-risk management amid shifting market dynamics.
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In its latest outlook for Q2 2026, Neuberger Berman's Asset Allocation Committee acknowledges the persistent disruption caused by the Middle East conflict. However, the committee maintains a fundamentally constructive medium-term view on growth and risk assets, emphasizing the increased importance of precise risk-taking amid a landscape of slightly slower growth and elevated inflation.
The report highlights that valuation multiple contractions have created appealing entry points for investors in U.S. large-cap equities and select emerging markets. Contrary to market expectations, which appear to be pricing in more monetary tightening than central banks are likely to implement, short-duration bonds are identified as a compelling contrarian investment opportunity.
With traditional diversification strategies faltering and energy markets undergoing structural repricing, the committee suggests that commodities and hedged strategies warrant greater consideration for managing tail risk. This strategic pivot is crucial in an environment where conventional hedges are proving less effective.
