Factset Outlook 2026: US Market Outlook & Asian Investor Strategy

2026 S&P 500 Earnings Preview: A 15% Growth Story—Should Singapore Investors Double Down or Take Profits?

The S&P 500 $S&P 500(.SPX)$ is poised to deliver its third consecutive year of double-digit earnings growth in 2026, with analysts forecasting a robust 15% year-over-year increase—well above the 10-year annual average of 8.6%. For Singapore-based investors heavily allocated to US equities, this begs a critical question: is this the time to accumulate or rebalance toward Asian opportunities?

The "Magnificent 7" Narrative Frays at the Edges

Here’s the surprise: only two of the top five earnings growth contributors for 2026 belong to the fabled "Magnificent 7"—NVIDIA $NVIDIA(NVDA)$ and Meta $Meta Platforms, Inc.(META)$ Platforms. While this elite group is still projected to grow earnings by 22.7%, the "other 493" companies are expected to accelerate to 12.5% growth, up from 9.4% in 2025.

For Singaporeans, this signals a diversification imperative. If your portfolio is concentrated in tech giants via $Deepwater Beachfront Small Cap ETF(DBSC)$ Vickers or POEMS accounts, 2026 may be the year to broaden exposure. The projected earnings growth spans all eleven sectors, with Information Technology, Materials, Industrials, Communication Services, and Consumer Discretionary leading double-digit expansions.

A key supplementary metric to earnings is revenue performance. For CY 2026, the S&P 500's estimated year-over-year revenue growth rate stands at 7.2%, outperforming the 5.3% trailing 10-year average (2015–2024). Sector-wise, ten out of the eleven sectors are projected to achieve year-over-year revenue growth, with the Information Technology and Communication Services sectors leading the momentum. Notably, the Energy sector is the sole exception, expected to register a year-over-year revenue decline in 2026, forming a clear sectoral divergence in revenue trends.

Valuation Disconnect: US vs Asia

The S&P 500’s $S&P 500(.SPX)$ estimated net profit margin of 13.9% for 2026 would mark the highest since 2008, but this comes at a premium. While US equities trade at elevated multiples, Asian markets—particularly ASEAN and India—offer compelling valuation discounts. The key risk? Currency volatility.

Singapore Investor Action Items:

Hedge currency risk: Consider USD/SGD hedged ETFs if maintaining US exposure, as MAS's managed exchange-rate regime may face pressure from Fed policy shifts.
Sector rotation: Use the SPDR S&P 500 Sector ETFs available on SGX to tilt toward industrial and materials stocks benefiting from US infrastructure spending.
Active management comeback: The SEC's approval of dual-share class ETFs in 2025 paves the way for actively managed ETFs. Singapore's high-net-worth investors should monitor launches from Vanguard and BlackRock—especially those focusing on dividend aristocrats, which align with Singaporeans' yield preference.

Crypto Currency ETFs: A SGD 6 Billion Inflow Story

2025 saw half of all currency ETFs launching with a crypto focus, attracting USD 6 billion in inflows. For Singapore accredited investors, this trend coincides with MAS's evolving crypto custody regulations. However, the OCC's Letter 1188, enabling US banks to engage in crypto transactions, increases liquidity but also systemic risk. Caveat emptor—crypto ETFs remain speculative and should occupy no more than 3-5% of a portfolio.

Bottom Line for Singapore Investors

The 15% earnings growth story is compelling, but execution matters. Use 2026 to rebalance from concentrated tech bets toward sector-diversified, cost-efficient ETFs while keeping an eye on Asian valuation gaps. The US market offers growth; Asia offers value. The prudent Singapore investor needs both.

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