Last Week at a Glance
Equities declined last week, driven by a selloff in AI-related stocks.
Equities
Will the Recovery in European Earnings Continue?
Yes. Europe’s sector mix is better positioned for today’s environment than it was during the low-growth, low-rate, underinvestment regime of the prior decade.
VantagePoint: The Iran War Fuels the Case for Portfolio Resilience
The Iran War is testing markets’ tendency to look past geopolitical shocks. Alternative shipping routes, inventory drawdowns, and supply outside the Middle East have kept crude moving, but refined fuels and LNG remain constrained, leaving little room to absorb further disruption. Our base case is a simmering conflict with partial energy flows and elevated, volatile costs, while wider disruption could push inflation higher and slow growth. Investors should stress-test portfolios alongside spending needs and other obligations, reduce overlapping exposures, and add distinct return drivers while retaining growth holdings supported by long-term valuations.
Last Quarter at a Glance
Q3 ended on a weak note as rising bond yields weighed on asset class returns in September.
Should Investors Act on the US Midterm Elections?
No. The November US midterm elections could affect regulatory, fiscal, foreign, and AI policy, but uncertain outcomes and market implications make election-driven trades a poor basis for investment decisions. In our view, investors are better served by maintaining resilient, diversified portfolios than by positioning for an anticipated election outcome.
Last Month at a Glance
Global equities advanced in August, gaining 2.3% as resilient activity data and earnings outweighed higher bond yields.
US Manager Universe Statistics: Second Quarter 2026
This publication presents manager performance for 37 asset classes and substrategies, showing the median, mean, and key percentiles of return. Relevant indexes for each asset class are also included to provide market context.
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.
Has Quality Lost Its Edge?
No. The medium-term case for holding quality remains sound, backed by healthy fundamentals, reasonable relative valuations, and quality’s diversifying properties, even if the current cyclical environment is not yet fully supportive.