Dambisa Moyo identifies three major trends that will determine winners and losers in financial markets

By Dambisa Moyo*

Three major trends are upending financial markets, encouraging a greater risk-on mentality, and shaping how investors earmark capital, position their portfolios, and ultimately create market winners and losers.

The first trend concerns the underlying structure of global debt markets, specifically the amount of outstanding debt, the maturity and duration of bonds, and the holders of such debt. According to the International Monetary Fund, global debt breached $100 trillion at the end of 2024 and is projected to approach 100% of global GDP by 2030, compared to 90% before the COVID-19 pandemic.

Already, debt-to-GDP ratios exceed 100% in developed countries such as the United States, Canada, Japan, Italy, France, Spain, and the United Kingdom. US public debt is at unprecedented levels and continues to rise, with interest payments now exceeding defense spending.

While UK government debt is rising by £428 million ($673 million) per day, French government debt rose by more than €750 million ($871 million) per day in the second quarter of 2025. Moreover, the outstanding debt from student loans, car loans, and credit cards has risen above $1 trillion for each class. In the case of US student loans, cracks are showing, with more than nine million borrowers missing at least one payment in 2025.

Meanwhile, debt duration and maturities are getting shorter as the US, the UK, and Japan resort to shorter-term financing to keep their interest payments down, respond to investor demand, and stay fiscally afloat. After slashing sales of long-dated bonds to record lows in 2025, the UK is considering expanding its market for ultra-short-dated bills. In the US, 60% of the new debt raised by the government between July and October of last year came from T-bills. The worry now is that this approach will expose both governments to potentially costly interest-rate swings when debts need to be rolled over.

There have also been notable shifts in who is holding government debt. For example, although China has been trimming its holdings of US debt, it remains the second-largest foreign lender to the US government, with some $700 billion in Treasury bonds. As geopolitical tensions between the two countries rise, it will be reasonable to ask how much leverage over the US this gives China. Similarly, one-third of UK gilts are held by overseas investors – the highest share in the G7 – which speaks to a source of growing vulnerability.

Finally, central banks have slowed their purchases of US Treasuries and even started selling the bonds they bought as part of the stimulus programs following the 2008 and 2020 crises. According to the Bank for International Settlements, hedge funds and other investment firms have been filling the void. But since hedge funds often use leverage to generate higher returns on their trades, this shift brings greater risk into the US Treasury market.

Given these trends, sovereign debt and fiat currencies will be the likely losers (in terms of returns), while hard assets like gold and silver will be winners, as they were in the second half of 2025. After all, the increase in sovereign liabilities raises the prospect of renewed quantitative easing, driving more inflation.

This also means that companies with strong pricing power – the ability to raise prices without losing sales – should win out. In fact, across the $150 trillion global bond market, investors are coming to the conclusion that some companies are safer bets than even the most powerful governments. A preference for corporate balance sheets that are in better shape than some sovereigns could put pressure on public debt, particularly debt backed by fiat money and the risk of inflation.

Market Makers and Takers

There are also structural changes in global stock markets, with the decline in publicly traded equities among the most notable trends. The number of companies in the FT Wilshire 5000 Total Market Index, for example, has fallen from a peak of 7,562 in July 1998 to just 3,326 as of December 2024. Although the US experienced a relative resurgence in initial public offerings last year, European IPO activity in 2025 was at its lowest point since the global financial crisis. Only 47 IPOs were completed in the first nine months – 70% below the 20-year average. These trends imply that more companies are staying private for longer, with some, like the payment processor Stripe, simply self-financing.

Moreover, there is increasing concentration of ownership and of returns. The “Big Three” asset managers – BlackRock, Vanguard, and State Street – are the top shareholder in nearly 84% of S&P 500 companies. With significant voting power through diversified passive index funds that hold permanent stakes in thousands of firms, they are fundamentally reshaping corporate governance.

With respect to returns, the “Magnificent Seven” tech firms (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla) have maintained their dominance of the S&P 500. As of December 2025, these companies represented roughly 34-37% of the S&P 500’s total market capitalization. In 2023, the Mag 7 contributed more than 62% of the overall gain in the Russell 1000 Index and collectively returned 75.71% – more than triple the return (24.23%) of the broader S&P 500 Index.

While public markets have been shrinking, private markets have been growing and seeking high-quality assets, some of them privately owned, and some of them publicly listed but with the potential to be taken private. Notably, sovereign wealth funds, whose assets under management surpassed $15 trillion in 2025, continue to expand their holdings. In an especially high-profile recent deal, Saudi Arabia’s Public Investment Fund led a $55 billion take-private acquisition of the video-game developer Electronic Arts.

Globally, US equities remain best positioned to lead and capitalize on the AI and energy-transition supercycles, both of which are still in their early stages. At the same time, the massive financing needs of the largest AI companies should continue to benefit private equity and private credit. If so, IPOs may well rebound as these companies realize that they need public markets to finance their growth ambitions. The relative losers, in this context, will include everyone else: all the companies that are not viewed as “AI winners,” or whose business models could be disrupted by AI. Thus, the opportunity to take perceived AI losers private, or to pursue major investments in AI adoption privately, will continue to drive private-equity activity.

Risky Business

Finally, significant shifts are underway in terms of global risk. The increase in private assets means that a growing share of investments are less regulated, shielded from scrutiny by public markets and regulators. According to Ocorian’s Global Asset Monitor, total assets hit a record $246.8 trillion in 2024, up 11.5% year on year. The growth of private markets has been a major part of this story, with equity, credit, real estate, and infrastructure assets under private management nearly tripling in the preceding decade.

Worryingly, this growth in private assets implies larger pockets of unobservable risk. “Shadow banking” has long grown outside the purview of regulators, compounding both financial and real economic risks, and now $124 trillion in intergenerational wealth transfers are expected by 2048. These could contribute further to global risks as beneficiaries invest in private markets and crypto.

Increased wealth transfers, combined with bubble-like markets, may benefit riskier assets for now; but under the current rules, they will also introduce systemic risks. Recent changes to regulations over 401(k) pension savings provide more opportunities for more investors to place risky bets on alternative assets such as infrastructure, venture capital, meme coins, individual stocks, sports, cryptocurrencies, and gold. They also allow for more leveraged positions and shorter investment and asset-holding periods, such as through zero-day options (one-day bets on an asset’s price movement).

As risk appetites grow, new technologies and trading platforms are increasing the speed of high-frequency and algorithmic trading. Owing to the integration of AI, quantum computing, and advanced data analytics, high-frequency trading is expected to grow by 7% per year between 2025 and 2030, and this will deepen its influence on market dynamics, leading to higher trading volumes and greater liquidity.

When market volatility is heightened further by geopolitical and macroeconomic uncertainty (especially regarding interest rates and trade policy), trading activity will increase as investors and algorithms react rapidly to market fluctuations. Add the prospect of near-24-hour trading on major exchanges like NYSE Arca, and the overall volume, frequency, and volatility of trading will increase even more.

Each of these trends suggests that risk assets will be the winners in terms of returns, at least in the short term. But investors should beware, because the same trends also threaten to alter the functionality of capital markets in multiple ways, including by reducing liquidity (in cases where private ownership is on the rise), diminishing the observability of market-clearing prices, limiting price discovery (where buyers and sellers meet), and increasing asset-price volatility. These shifts offer opportunities, but they also imply many hazards, especially for those who have not properly surveyed the changing global landscape.

Dambisa Moyo, an international economist, is the author of four New York Times bestselling books, including Edge of Chaos: Why Democracy Is Failing to Deliver Economic Growth – and How to Fix It. This content is © Project Syndicate, 2026, and is here with permission.