Dear Reader,
Good morning — this is Dylan Jovine with Behind the Markets.
Happy Wednesday. Today is December 31st… New Year's Eve.
Tomorrow is 2026. How about that?
When I was younger, New Year's Eve was all about staying up late, going to parties, celebrating, and making noise….
Now that I'm older, what I appreciate most about New Year's Eve is almost the opposite.
I'll probably be in bed by nine — which, believe it or not, is late for me.
My kids tease me about it all the time. But I love waking up on January 1st calm, clear-headed, balanced, and ready to go.
Today, I want to talk about a recent note Morgan Stanley released - their five big trends to watch in 2026.
The first — and I love how they put this — is: "The robots are coming."
And they're not wrong.
AI is already everywhere. It listens to us. It recognizes our faces. It tracks where we are. Every camera you walk past now becomes training data.
AI can read. It can write. It can paint. It can generate videos of cats playing poker if you want.
But what AI hasn't really done yet… is move. It hasn't stepped off the screen in a meaningful way.
Morgan Stanley believes that's what happens next.
In biology, "motility" means an organism can move under its own power.
In human history, once life learned to move, everything changed.
Think Precambrian explosion. That's where AI is right now — on the verge of going from digital… to physical. Any machine that can be automated likely will be.
And here's the rule of thumb: if you solve autonomy for cars… you basically solve autonomy for everything. That's where embodied intelligence comes in. We've talked about this a lot. We have an entire research initiative around it.
And those opportunities are even stronger today than when we first started pounding the table.
The next trend Morgan Stanley highlights is the weakening of the U.S. dollar. The dollar fell roughly 10% this year. That's a big move — and it's largely because we continue to print and spend far more than we should. As long as the U.S. runs deficits like this, the dollar will remain under pressure. That's not controversial — that's math.
Which brings us to trend number three: gold. Morgan Stanley asks the question we've all been thinking — what's really behind gold's powerful rally?
Yes, there's inflation hedging. Yes, there's bubble protection. Yes, there's currency debasement.
But they add something else — something big.
They believe this may signal a deeper "global financial shift." Central banks are diversifying away from the U.S. dollar. Countries are experimenting with digital currencies. Some may even be backed by gold. Think about that. If global currencies start anchoring themselves to hard assets… that changes everything. And it raises a fascinating thought: imagine if one of the long-lasting outcomes of Trump's "Big Beautiful Bill" policies is that it ultimately accelerates the decline of the dollar as the world's unquestioned reserve standard. That would be ironic… and historic.
Another key trend they highlight is private credit contracting — meaning financing will tighten — and that has ripple effects. And finally, they point out something we've been saying all year: healthcare is historically cheap. On a relative basis, it may be the best value sector in the market in 30 years. There will be tremendous opportunity there in 2026.
That's why if you haven't already, make sure to check out the one stock we think will benefit the most from the upcoming biotech rally.
So yes — there are challenges ahead. There are risks. But there are also enormous opportunities if you're disciplined, thoughtful, and positioned correctly.
The robots are coming.
Currencies are shifting. Inflation pressures remain. And innovation is accelerating faster than policymakers can react. It's going to be an interesting year — and we'll stay cautiously optimistic.
That's all I have for today. Have a wonderful New Year's Eve. Enjoy your time with family. I'll see you on the other side.
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