Prospettive
& attualità.

•    Kevin Warsh’s “hawkish” stance in the face of persistent inflation and US economic resilience led to a rise in interest rates, weighing on risky assets.
•    In the eurozone, August inflation rose to 3.3% as expected, largely due to energy prices, while the Chinese economy continues to suffer from sluggish domestic demand.
•    In Japan, economic indicators are surprising on the upside and comments from the Bank of Japan remain restrictive, paving the way for a likely rate hike in September.

As summer draws to a close, markets have taken a completely different turn. Following a volatile first quarter, the period that followed the publication of Q2 earnings results has reaffirmed the merits of our positioning: maintaining a contrarian exposure to software and healthcare stocks has proven to be both a powerful and a diversifying source of returns. 

On the software front, which is our largest overweight, fears of AI disruption were tempered by a very good earnings season, as software companies are quickly adapting their offering to integrate AI agents.

Why is this? What differentiates the asset classes?

Alternative social infrastructure offers resilient debt opportunities in essential healthcare, education, logistics and water services.

•    The lull in tensions over Iranian oil driven by Strait of Hormuz negotiations is overshadowed by the resumption of the trade war waged by Washington against Canada and China.
•    Economic activity in the US and the Eurozone shows resilience, though tempered by stagnant US consumer spending and a contraction in French services. 
•    Pressure on the OAT-Bund spread continue to build, fuelled by the budgetary deadlock in France and investor concerns over the economic proposals of the leading presidential candidates.

—    Alain Krief is promoted to Global CIO for Edmond de Rothschild AM, and joins the Asset manager’s Executive committee. 
—    Charles Lilford joins Edmond de Rothschild AM as Co-Head of Equities, and Senior Portfolio Manager for the Big Data strategy. 

•    Oil flows passing through the Strait of Hormuz are reportedly overvalued, which, combined with Houthi attacks and rising gas prices, pushed the global commodities index above its 2022 peak.
•    Faced with the sharp rise in government bond yields, US Treasury Secretary Scott Bessent massively increased Treasury buybacks to reassure markets, triggering a drop in the dollar and a surge in precious metals in return.
•    Equity markets racked up serious losses this week. The tech sector was particularly badly hit and this time with additional worries over increasingly powerful Chinese AI models, although future productivity gains remain promising. 

•    Tensions between the United States and Iran, as well as attacks in the Red Sea, are reigniting fears over energy supplies, pushing the price of a barrel of oil towards $100.
•    The US is calling for an additional $87 billion in military spending, whilst Donald Trump has announced further tariff increases.
•    In the eurozone, the slowdown in inflation allowed the ECB to keep interest rates unchanged at its July meeting.

•    This week's inflation data in the US offered markets some unexpected relief.
•    US-Iran tensions are now in a low intensity conflict but the consequences could still prove damaging for commodities.
•    A risk premium on short US rates and the choppy geopolitical context have led to the Momentum Asset trade unwinding, particularly for semiconductors

•    The Middle East conflict had gradually been receding into the background but the resumption of hostilities between Washington and Tehran caught investors off guard.
•    The latest economic data and comments from some Fed governors mean we still cannot rule out a rate hike at the end of July so real interest rates have moved towards new highs.
•    We have turned positive on government bonds as Central bank risk is now largely discounted.

•    The US-Iran agreement has unblocked oil traffic through the Strait of Hormuz, causing Brent crude to fall to around $70 per barrel and fuelling the view that the energy crisis is now on the wane.
•    In the eurozone, prices rose 2.8% over a year, down from 3.2% and less than the 3% expected, whilst in the US, labour market momentum is slowing, with job creation falling short of expectations.
•    China’s PMIs delivered a more reassuring message with strong industrial activity underpinned by foreign demand.

Asset Allocation: “Peace Piece” or the archipelago of interdependencies
Benjamin Melman, Global CIO AM & Michaël Nizard, Head of Multi-Asset & Overlay

Fixed Income: Seeking Alpha in the bond markets for the second half of 2026
Alain Krief, Head of Fixed Income

European Equities: Game-changing investment supercycles
Caroline Gauthier, Co-Head of Equities 

International Equities: AI: Will semiconductors remain the centre of gravity?
Xiadong Bao, Portfolio Manager - International Equities