UK Investor Magazine Top stock picks and equity market outlook for 2026 with Morningstar’s Michael Field
Jan 16, 2026
Michael Field, Morningstar’s Chief Equity Market Strategist for EMEA, brings sector and regional investment expertise. He outlines 2026 themes like valuation, tightening and sector rotation. He contrasts macro conditions with 2025 and highlights overvalued and undervalued sectors. He flags country differences across Europe and names top stock ideas including Persimmon and Diageo.
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Macro Improvement Priced In
- Macro fundamentals (rates, inflation, GDP) have improved since 2025 and largely already priced into markets.
- That helps explain why equities sit near Morningstar's fair value estimates entering 2026.
Pick Sectors Selectively
- Avoid buying entire sectors trading at premiums, such as financials and utilities, where Morningstar sees overvaluation.
- Consider buying consumer defensives and healthcare outright, where valuations and momentum are favorable.
Country Prices Mirror Sector Weights
- Country-level valuations reflect sector concentration more than local GDP: Italy and Spain now look expensive, Netherlands and Denmark cheaper.
- Large index constituents (e.g., ASML, Novo Nordisk) can heavily skew national index performance.