Value, mid-caps and global stocks move into focus for 2026 positioning

U.S. markets are trading cautiously as investors weigh stretched valuations, shifting currency dynamics and uncertainty around future tech leadership. With earnings continuing to outperform expectations in 2025, attention is turning to whether broader segments of the market can take the lead next year.

BNN Bloomberg spoke with Brian Vendig, CIO of MJP Wealth Advisors, who says stronger earnings, moderating U.S. dollar strength and a more neutral Federal Reserve stance could support wider market participation in 2026. He highlights opportunities in value, mid-cap and international equities, along with sectors poised to benefit from infrastructure and AI-related investment.

Key Takeaways

• Earnings continue to exceed expectations in 2025, reinforcing them as a key driver of equity performance heading into 2026.
• Broader market participation is expected next year as rate policy turns more neutral, currency forces shift and recession risks remain low.
• Value, mid-cap and dividend-paying stocks are becoming more attractive as multiples expand outside megacap tech.
• International equities present an opportunity if U.S. dollar strength moderates through 2026, improving relative valuations.
• Cybersecurity and software stocks may rebound as AI-related infrastructure expands and a lower-rate environment encourages more M&A.

Read the full transcript below:

ANDREW: We are joined by Brian Vendig of MJP Partners. Always great to see you. Thank you very much indeed for joining us. Give us your take on the markets right now. It does seem there’s a frisson of fear around these tech stocks.

BRIAN: Good morning, Andrew. I think investors are hedging a little bit after a strong week last week, and all eyes are on next week’s Fed rate decision. We also have some inflation numbers coming out on Friday for the month of September. At the end of the day, though, when you look back at the companies that have reported so far for Q3 earnings, they’ve definitely exceeded analysts’ expectations, with year-over-year growth of about 13 per cent and expectations going into the quarter around eight to nine per cent.

Right now, when we look at some deleveraging coming out of crypto, the yen, interest rates going up in Japan affecting currency markets — today is just a day where we’re taking a little bit of profit after a strong week last week.

ANDREW: You think it is a time to consider owning more dividend-paying stocks?

BRIAN: I don’t think the AI investment trade is a bust. I think there are concerns about valuation and capital spending — can this continue at these levels next year? I think spending will probably moderate, but I still think there are productivity gains and societal benefits that AI will deliver, which will help companies’ profits and bottom lines.

Opportunities do exist because of earnings growth and multiple expansion in areas outside tech. We see those in outlooks for 2026. So looking at mid-cap stocks, value and dividend-oriented stocks, as you mentioned, Andrew, as well as, within that dividend complex, health care, industrials and financials are areas to keep an eye on.

ANDREW: Are you talking Canada or the States here?

BRIAN: Generally speaking, domestic and international value makes sense. If you look at Canada specifically, commodity-based businesses are a good uplift when considering changes in currency valuation. I think the financial sector overall for North America is an opportunity with a steepening yield curve.

When you look at valuations, international equities present an opportunity, especially if you believe U.S. dollar strength will moderate or be benign over the course of 2026. It all comes back to earnings at the end of the day. We’re not foreseeing a recession next year. The Fed is moving more neutral, and those are things that help support equity valuations.

ANDREW: What is your feeling on oil and energy right now?

BRIAN: I think overall for oil, it feels like there’s a bit of a supply glut — a little more supply than demand. But when you look at outlooks for energy requirements over the balance of the decade, there’s still strong demand for all types of energy, oil included.

Do we expect prices to really spike over the next 12 months? Not really. But do we expect strong demand for electricity and other energy inputs into the supply chain? Absolutely — especially when you think about investment happening in infrastructure and the electrification space to support AI innovation.

ANDREW: And one type of stock that you are interested in owning is the big software security stocks — not necessarily Palo Alto Networks, I know, but names like that.

BRIAN: Software has been in the penalty box over the course of this year, and recently we’ve seen a pullback in cybersecurity. Over the course of next year, there should be more demand as AI innovation continues to be built out, and cybersecurity has to be part of that equation.

Plus, with so many different cybersecurity and software offerings out there, we expect that in a lower interest-rate environment there will probably be an uptick in M&A, which could be beneficial for shareholders.

ANDREW: We’ll have to leave it there, Brian. Thank you very much indeed.

BRIAN: Thank you.

ANDREW: Brian Vendig of MJP Partners.

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This BNN Bloomberg summary and transcript of the Dec. 1, 2025 interview with Brian Vendig are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.