Our Insights
Market Synopsis – July 2026
The US economy has made a moderate recovery in recent months, a far cry from what the Sahm rule breach a little under two years ago would have predicted. The recovery is believed to have been supported by two perhaps interconnected factors: Timely Fed policy and the seemingly unstoppable AI boom.
The road to this inflection point has not been smooth, with the US-Iran conflict serving as one notable case in point. But following a near 3-month exchange of rockets and words, the most robust version of a ceasefire so far is now shakily in place. The question now is whether the recovery in the US labour market will be enough to overcome one of the economy’s most stubborn structural challenge: The K-shaped divide.
Market Synopsis – June 2026
Markets are increasingly pricing in a benign outcome for both inflation and geopolitics, even as the appointment of Kevin Warsh could mark the most significant shift in Federal Reserve thinking since the Global Financial Crisis. At the same time, unresolved risks surrounding the Strait of Hormuz and signs of an AI-driven earnings bubble raise questions about whether today’s market optimism is mistaking a fragile foundation as simply tail risk.
Market Synopsis – May 2026
The AI trade has regained momentum following a major shift in its demand structure. The focus has increasingly moved away from model training and toward agentic AI inference, where systems continuously plan, execute tasks, and reference prior context autonomously. This process is substantially more compute-intensive, driving renewed demand for GPUs, HBM memory, and data-centre infrastructure. The rewritten thesis thus deserves an updated review of the bubble talk.
Market Synopsis – April 2026
Following the ceasefire in the Iranian conflict, markets are attempting to distinguish between what shocks were temporary and what may prove more structural. The Strait of Hormuz still remains severely disrupted, leaving oil markets highly sensitive to any setback in negotiations.
While equities quickly spiked on the news, and oil fell, this move seems to disregard any of the risk that still remains regarding the sustainability of the ceasefire, and the damage that has already been done. This, alongside the recent sentiment decline in AI-related equity valuations, is beginning to grow concern regarding what the dual pressure of household wealth and near-term inflation could mean for the US economy.
Market Synopsis – March 2026
The Strait of Hormuz is a narrow waterway between Iran and Oman, connecting the Persian Gulf to the Arabian Sea. It is the world’s most critical oil transit chokepoint, with roughly 20% of global oil supplies passing through it daily. The US-Israel declaration of war against Iran on February 28th has thrust this waterway into the centre of global markets, representing a materially higher geopolitical risk than during last year’s 12-day war. A prolonged disruption to Strait transit would likely affect both European and US economies, albeit through two distinctly different channels.
Market Synopsis – February 2026
On the surface, the comparison of today’s AI-driven surge in equity markets through the lens of the 2001 crash is not a new exercise. However, following the recent volatility within AI-linked equities, happening in parallel to a weakening in certain key economic variables, an interesting pattern has emerged. Notably, this pattern fits the puzzle of a more nuanced characteristic from the 2001 analogy: The potential for a two-phase bear market. Given the continued weakness in the US real economy, and policy uncertainty following Kevin Warsh as the new Fed chair nominee, a scenario analysis using the model of a two-phase bear market serves as a useful exercise for gauging where the US equity market can potentially go in 2026.
Market Synopsis – January 2026
Expanding on our usual monthly commentary, we outline our core thesis for the US economy and equity market as we enter 2026. The outlook is increasingly shaped by two forces that are evolving in tension with one another: A looming AI winter in financial markets, and a deepening divergence in a K-shaped economy. A key thread among both forces could be middle-income households, the backbone of American consumption. As a consequence of a plateauing AI force, middle America risks becoming a fuse that will light the dynamite of a K-shape economy reversal in 2026.
Market Synopsis – December 2025
As 2025 closes, markets remain dominated by momentum amid high uncertainty. For now, we focus on what we can quantify: The 2026 effects of a potential reversal in the K-shaped economy, US fiscal policy, and the path forward after the AI trade faced its first real sentiment correction.
It is possible that we may be entering 2026 alongside a more fickle general investor, with AI bubble talk now brought into the limelight. Highlighted by Meta and Oracle’s recent weakness, the so-called “Metaverse Moment” could signal further caution, particularly as AI adoption and GPU rental trends show early signs of plateauing.