“Solid growth and the AI buildout should buoy U.S. earnings. That and immutable economic laws keep us overweight U.S. stocks. We prefer select sectors. U.S. stocks rose last week even after regional bank concerns sparked a brief drop. Gold surged to new highs. U.S. bond yields hit six-month lows. The release of the postponed U.S. CPI will give data-starved investors an update on whether core inflation is staying sticky before the next Fed meeting. U.S. stocks recovered after tough talk on U.S.-China trade began to look more like each side testing leverage before the planned meeting of their presidents. This aligns with what we’ve long said: immutable economic laws limit policy extremes and keep us overweight U.S. stocks. We think the strong start to the U.S. third quarter earnings season validates this, as resilient growth, Fed rate cuts and the AI theme buoy stocks. Yet we get granular, tracking AI spend and tariff impacts.”
Morten W. Langer
