{"text":[[{"start":5.88,"text":"Worrying is for wimps. If we have learnt nothing else in 2025, it’s that the global economy, the companies inside it and the markets that reflect them are much more resilient than many of us predicted."}],[{"start":22.31,"text":"Tariffs? Whatever. Geopolitical alliances? Institutional integrity? Sure, sounds important. Despite all the challenges, and despite markets briefly falling off a cliff after Donald Trump’s tariff announcement in April, stocks have mostly sailed higher, bonds are pretty well behaved and private assets have conspicuously not blown up. The consensus now is that the good vibes will last, and markets will blast through 2026 in rude health."}],[{"start":58.489999999999995,"text":"Nevertheless, fund managers are paid to consider risks. Some are impossible to predict or manage — think meteor strike, zombie apocalypse and the like. But some are more quantifiable."}],[{"start":73.11999999999999,"text":"The obvious pot that could boil over is the artificial intelligence trade. Bumper tech revenues alongside massive spending on AI infrastructure mean stock outperformance is frothy, but not a mirage. What we do not yet know, however, is how deep and wide the moat around US Big Tech really is, whether China could catch up (the DeepSeek moment of January 2025 suggests that is possible), whether today’s dominant companies will be tomorrow’s (as Alphabet’s challenge to Nvidia illustrates) and, in the long term, whether end consumers will pay enough for this technology to justify all the spending. The sheer size of Big Tech in investors’ portfolios makes these questions dangerous to ignore."}],[{"start":124.75999999999999,"text":"Nvidia alone is still worth north of $4tn, even after its recent share price setback. A dramatic pullback across the industry would leave a large mark on the wider US market, and a blast radius across global stocks. Nothing would be spared in a serious shock."}],[{"start":147.14999999999998,"text":"In its 2026 outlook, BlackRock underlines this point. “If the AI theme stumbles, the impact will likely dwarf any seeming diversification away from it,” its team said. This is a big “if”, but still. “Portfolios need a clear plan B and a readiness to pivot quickly.”"}],[{"start":169.92999999999998,"text":"Investors often tell me they are diversifying by bulking up in Asia or heading into energy infrastructure or tech-related resources to reduce direct exposure to chips. To me, this makes no sense, as these are all parts of the same AI value chain. In a downturn, we would find out who is right."}],[{"start":192.46999999999997,"text":"The second big risk is that excitable spending on AI may contribute to a revival in inflation. Annual US consumer price inflation still stands at about 3 per cent, and the Federal Reserve’s preferred measure is also comfortably above target. Investors are broadly assuming that inflation will keep drifting lower, allowing the US central bank to cut interest rates at least once more next year. But some suspect tariff-led inflation is still lurking."}],[{"start":226.16999999999996,"text":"Then what? Market volatility seems inevitable. If the Fed raises rates, then stocks will probably suffer. If it holds fire or even keeps cutting — not impossible once chair Jay Powell steps aside in May — the pain would be likely to emerge in bonds and the dollar."}],[{"start":247.74999999999994,"text":"Smaller central banks, such as those in Australia and Norway, are already backing away from further rate cuts. If the US ends up in the same place, a lot of investors have a problem."}],[{"start":261.09999999999997,"text":"Some of the quirkier potential banana skins include crypto, which is becoming ingrained in high finance under Trump. An accident there — hardly difficult to imagine — would harm the retail investors who have propped up stocks this year, fanning stress across other markets, and could even require central bank intervention given large reported holdings of short-term government debt among operators of stablecoins."}],[{"start":292.23999999999995,"text":"Meanwhile, in Japan, government bond yields are kicking higher as interest rates appear to be lagging behind a rise in inflation. Yes, this has been a risk for years, and no, it has never really bitten hard, but now it does seem realistic that yields could rise enough to mean that domestic investors feel no need to park money overseas. Taking a large buyer of global debt out of the equation right now would not be helpful."}],[{"start":323.59,"text":"The last big reason for caution is consensus itself. Pessimists are quite hard to find. Permabear Albert Edwards at Société Générale says he still believes US stocks are in a valuation bubble that will drag down the economy when it collapses. But even he notes that “I struggle to see an imminent macro trigger for a major bear market”."}],[{"start":349.96999999999997,"text":"None of these things means a crash or even a decline in risky assets is inevitable. But the overwhelming optimism means small slip-ups can produce painful volatility. Each of these risks is worth watching in 2026."}],[{"start":374.31,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1766059075_4138.mp3"}