Is the Euro Area Heading for Another Sovereign Debt Crisis?
No. France’s fiscal and political problems do not appear to signal another euro area sovereign debt crisis.
Authored by: Max English
Should Investors Rethink the Role of Emerging Markets Equities in Their Portfolio?
Yes. Investors should reassess the role of emerging markets equities because benchmark concentration has reduced diversification benefits and increased exposure to the same artificial intelligence–driven forces leading developed markets.
Review of Market Performance: Fiscal Year 2026
The commodity supply shock mildly slowed global growth, though the effects varied by region. Even so, global equities posted another strong fiscal year across a broad set of markets. The US dollar appreciated modestly, with the United States remaining relatively insulated from developments in the Middle East. Bond returns lagged as inflation pressures resurfaced, while real assets performed strongly as the supply shock intensified and demand tied to AI buildout continued to strengthen.
Germany’s Fiscal Boost Remains a Tailwind Despite Near-Term Risks
German equities entered 2025 with strong momentum, supported in part by a sharp shift in Germany’s fiscal outlook. After years of underinvestment, the government announced materially higher spending on infrastructure and defense. However, that momentum faded through 2025 into 2026, and German equities stalled.