News and Events

The UAE’s exit from OPEC weakens the cartel structurally, but markets are focused elsewhere: the Iran conflict and the Strait of Hormuz. The impact is already visible. Inflation expectations are rising and rate expectations have shifted sharply. US rate cuts this year are no longer expected by investors, while investors are pricing two hikes by … Continued

Is the market right to look past the conflict in Iran? With Brent at $108 and risks around the Strait of Hormuz, the concern is real. But as John Authers writes in Bloomberg Opinion, the more structural driver remains earnings. 12 months forward profits have been revised up by roughly $600bn in four months (+12%), … Continued

The Strait of Hormuz highlights a clear asymmetry: the US is largely insulated, Europe moderately exposed, and Asia highly dependent—China and India most of all. As political economist Shirley Ze Yu argues, China is caught in a trilemma it cannot escape: it cannot afford an Iranian victory, it cannot afford an Iranian defeat, and it … Continued

Since the recent peak, US technology stocks are down only around 2%, yet valuations have corrected much more meaningfully. The adjustment has therefore taken place through multiple compression rather than price declines, while earnings continue to grow. In effect, fundamentals are catching up with valuations. With the spread now close to -26%, a significant part … Continued

Capex at large tech companies has clearly taken off. A growing share of EBITDA is being reinvested into AI infrastructure, while the rest of the companies remain broadly flat. This is the key point: we have moved into an investment phase. The strategic logic is clear — AI will require massive upfront spending. The question … Continued

The dominance of the “Magnificent 7” has defined recent market performance, but the relationship with the broader market is starting to shift. The 100-day correlation between the S&P 500 Equal Weight Index and the Magnificent 7 has recently turned negative again, meaning mega-cap tech and the rest of the market are moving in different directions. … Continued

Since the announcement of Warren Buffett’s retirement in May last year, Berkshire Hathaway has underperformed the S&P 500 by roughly 40%. This relative weakness comes despite a succession that, in our view, is built on continuity rather than disruption. Greg Abel, now at the helm, has worked alongside Warren Buffett for more than 25 years, … Continued

Today’s chart highlights a recurring pattern in equity markets: periods of elevated concentration. The Nifty Fifty in the 1970s (~40% of the S&P 500), Japan in the late 1980s (~44% of MSCI ACWI), and Tech in 2000 (~41% of the S&P 500) all reached comparable levels. Today, the largest AI-related stocks are again approaching ~40% … Continued

Inflation in the Eurozone is going to remain above the ECB’s 2% target across all three scenarios. In a severe case, it may even shoot above 6%. This reinforces the current dilemma for central bankers. The recent inflation spike is largely driven by energy and geopolitical tensions linked to the Iran conflict — in other … Continued

US and European equity markets have now fully retraced their losses since the beginning of the Iran conflict. Oil, however, tells a different story, still trading roughly 27% higher. This divergence is striking given that the Strait of Hormuz — a critical artery for global oil and gas flows — remains partially constrained, and geopolitical … Continued