August 2026
16 Septermber 2026
Q1. Does M’s AI slowdown weaken the broader AI investment case?
M’s AI update highlights that execution and monetisation paths will vary across companies, but it does not undermine the structural AI investment story. We continue to expect AI adoption to drive sustained infrastructure investment, productivity gains and earnings growth over time, supporting diversified exposure across the broader AI ecosystem.
Q2. Could the renewed US-Iran tensions trigger broad-based earnings downgrades?
Absent a sustained rise in oil prices above USD110–120 per barrel, we expect global earnings to remain resilient despite heightened geopolitical uncertainty. Company guidance during the earnings season will be key to validating this outlook. We remain constructive on US risk assets and selective in Asia and like South Korea and China through targeted exposure. We favour long-term structural themes including AI, energy security and defence, while using periods of geopolitical volatility to selectively add exposure.
Q3. How should investors position ahead of the US midterm elections?
US midterm elections may create short-term market volatility, but they are unlikely to alter the long-term fundamentals of market returns. Corporate earnings, inflation, interest rates and the broader economic cycle remain paramount. We favour diversified portfolios, high-quality US companies, investment-grade credit and hedge funds to help navigate policy uncertainty and market dispersion.
Q4. Semis look pricey—should adjust the strategy?
We believe investors should stay invested. More broadly, the valuation backdrop has become somewhat more balanced as market breadth and earnings momentum have improved. We remain constructive on the AI capex cycle, with opportunities broadening across AI enablers and adopters as AI investment and productivity gains increasingly extend across the wider economy.
Q5. What does reduced Fed forward guidance mean for US rates in 2026?
Reduced Fed forward guidance would imply the path of US rates will become increasingly data dependent, with market expectations likely to shift more frequently as economic data evolve. Rather than reacting to individual policy meetings, we focus on long-term fundamentals. We favour diversified portfolios across asset classes and geographies, while clipping coupons in quality bonds, and add to volatility strategies, hedge funds and alternatives to help navigate market swings.
Q6. How vulnerable are Asian markets to a stronger USD and higher US rates?
A stronger US dollar and higher US rates are likely to keep pressure on Asian currencies and drive continued divergence across regional markets, with technology-rich North Asia expected to remain relatively resilient. This reinforces selective positioning in the region. We remain overweight equities in mainland China, Hong Kong, Singapore and South Korea, and favour Asian IG credit over EM LC debt.
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