Florida Trust holds annual economic outlook
Florida Trust Wealth Management began the new year with its annual 2026 Economic Outlook events, global economic overviews that also looked at artificial intelligence (AI) and growth opportunities for the year ahead.
Held on Jan. 26 at BIG ARTS on Sanibel and at its Fort Myers office, the Q&A style programs featured insights from four of the company’s industry experts: Chief Operating Officer Ian N. Breusch, Chief Investment Officer Kristian R. Jhamb, Executive Vice President and Senior Portfolio Manager Logan S. Webb, and Vice President and Senior Portfolio Manager Jodi Schwartzel.
Breusch began with opening remarks followed by a brief review of the 2025 economy and expectations for 2026. He stated that for the first time in several years international stocks outperformed domestic stocks. Breusch also reported that the S&P 500 outperformed expectations and finished over 6,800, for a 16% return. For 2026 he anticipates some ongoing volatility in the market but expects U.S. equities to hold well.
During the panel discussion Breusch began by mentioning that the consumer is strong, the U.S. economy is solid; however, simultaneously unemployment is ticking up, and labor markets are beginning to show signs of deterioration. He asked Webb how to reconcile the competing forces.
“There are two parallel economies, one booming, while the other somewhat in shambles. The good news is the strength of the upper end of the consumer continues to drive markets higher,” Webb said. “The bad news is, consumers who don’t own appreciating assets, those who are paycheck to paycheck, unfortunately cannot keep up with inflation. This dynamic is causing the wealth gap to widen further. Here we find increasing debt, diminished saving, slowing spending and an economy that is not exactly thriving. Because of these two parallel economies, we believe investors need to be selective, as not all companies will be impacted equally.”
Breusch later led the conversation to AI. It has been a dominant investment theme since October 2022 with the launch of ChatGPT.
“It’s an incredibly complex ecosystem. A lot of interconnections and cross-financing are taking place, impacting the ability to assess true AI demand,” Jhamb said, mentioning that the leading players are Nvidia, Amazon, Broadcom, Meta, Microsoft, Google, Oracle, and OpenAI.
Schwartzel expanded on the conversation.
“AI and technology remain both powerful and promising, yet the landscape is quickly broadening beyond the traditional pockets of growth we have seen over the past three years in the Magnificent 7,” she said.
The Magnificent 7 is a term coined in 2023 to describe a group of seven dominant, high-performing U.S. technology and tech-adjacent companies that have driven a significant portion of the stock market’s gains in recent years. They are Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.
Schwartzel was asked what gives her the confidence that the market is going to broaden beyond them.
“Companies that are adopting AI across manufacturing, education and other areas will start to see cost efficiencies, new product offerings and other new solutions to complex challenges. Both consumer and corporate AI demand have led these companies to implement aggressive, costly projects to build data centers, expand cloud capacity, and begin to construct supercomputing hubs,” she said. “In 2026, we anticipate more diverse market participation as these projects come to fruition in the next nine to 12 months.”
Webb mentioned that the labor market will be an important factor in 2026 and AI could play a role. Baby Boomers, from which more than 10,000 per day are turning 65, are retiring each year in the U.S. and there are not enough workers coming up to replace them.
“Perfect timing for a meteoric rise in AI-related technology,” he said. “I’m envisioning a future where the U.S. economy is more productive with less human capital thanks to advancements in technology. But let’s not ignore the unemployment numbers; AI will certainly replace some jobs. But it will also create a whole new sector of additional jobs that didn’t exist in the past in addition to creating efficiencies and boosting productivity and GDP in the process.”
Jhamb added that the U.S.’s economic outperformance of other developed peers has been attributed to labor productivity, which itself is likely due to strong capital investment, R&D spending, and AI early adoption.
Schwartzel noted how recent federal legislation could provide an additional and meaningful fiscal-side boost in 2026.
Jhamb continued that the AI secular investment theme will require several things to go right in order to continue into a fourth year.
“The alpha dog at the top, OpenAI, needs to continue to do well, as it is so intertwined with the other players in the ecosystem. The hyperscalers, those builders of datacenter capacity, also need to get a better handle on cost pressures,” he said.
Schwartzel concluded the team’s remarks by stressing that rebalancing, investment selection, and diversification will be important to focus on in 2026. Overall, the panel was broadly optimistic on the prospects of the market run continuing, underpinned by strong macro- and company-level fundamentals.