Equities

Special Report

After 250 years, the USA is still the biggest thing happening in the world. But it faces huge challenges in the coming decades from socioeconomic imbalances and strategic competition.

Special Report

Our outlook for Fed policy in 2026.

The outperformance of the S&P 500 relative to the S&P 500 EW index is likely to continue over the next year, supported by stronger earnings growth. However, extreme levels of market concentration will ultimately halt the outperformance of the mega-caps.

Q3 results were strong but failed to impress investors, and Q4 will likely prove more challenging. Beneath the surface, earnings diverged sharply: Firms catering to affluent consumers maintained solid momentum, while those reliant on the mass market lagged. We remain equal weight Consumer Services and underweight Consumer Staples.

Tariffs are fading in importance as companies successfully mitigate cost pressures and preserve profitability. The recent wave of high-profile layoffs is more concerning, but there does not appear to be a systemic reason behind the announcements. However, emerging labor market softness could pose a major risk for equities. We remain vigilant.

Special Report

As hyperscalers expand global data center capacity, they are igniting a powerful industrial cycle. Capital Goods and Materials companies supplying turbines, grid components, cooling systems, and advanced connectivity materials for data center and energy infrastructure are emerging as key beneficiaries, positioned to capture structural growth as GenAI demand reshapes the economy.

Special Report

US-China decoupling and rare-earth supply disruptions created a unique opportunity for non-Chinese miners and refiners to scale production and achieve profitability. The build-out will be lengthy, costly, and fraught with challenges, but government support materially improves the odds. Rare-earth production outside China is a nascent investment theme; we are structurally bullish and recommend building a position by buying on dips by investing in a diversified basket of miners, presented in the report.

Strong results and constructive commentary from the US’s largest banks are encouraging: Consumers remain in solid shape, and the macro backdrop continues to favor equities. The outlook for the largest banks is positive, and they are unlikely to be affected by isolated credit events.

The economy remains resilient despite a softening labor market. As the economy shifts from labor toward capital, we may be in the early stages of a “jobless boom.” Our bull case for equities rests on strong earnings growth, accelerating GenAI adoption, monetary easing, and stimulus from OBBBA. Key risks we continue to monitor are rising bond yields and the threat of stagflation.

Special Report

Real Estate performance is contingent upon the Fed rate-cutting cycle. Yet, we worry about a hawkish Fed surprise and are closing our overweight in the sector. We also recommend a granular approach to subsector selection.