JEF Macro Weekly—A Friendly Bullish Reminder; AI Fatigue & Rotation

Research evidence excerpt

JEF Macro Weekly—A Friendly Bullish Reminder; AI Fatigue & Rotation

Global | Equity Strategy EquityJulyResearch12, 2026

STRATEGY NOTEJEF Macro Weekly—A Friendly Bullish Reminder;

AI Fatigue & Rotation

Zervos remains bullish despite rise in oil and potential for rate hikes later in year. Both Tom Simons and Chris Lafemina,

GREED & fear sees a sudden realisation by investors that hyperscalers will not JEF Metals & Mining analyst, made some

changes to their economic and commoditybe able to make a return on their AI-related investments will trigger a sudden

forecasts. Most notable, Tom has a rate

unwillingness to fund investments. Desh sees momentum now only driven by cut in Q4 and Q1, while Chris raised his

AI, could see unwind on adverse sentiment. When Mo unwinds, prefer quality Copper price but lowered Gold targets.

stocks with low-momentum for summer. Tom makes case for a rate cut.

David Zervos—The rates market has moved from pricing in two cuts by YE to pricing in two hikes,

coincident with a monument move in front month WTI prices. I continue to argue that the underlying

resilience of risk asset markets in the face of this rate/energy adversity is due to a powerful

undercurrent of economic strength being driven by a combination of productivity led technological

advance and pro-business policies.

GREED & fear—There is a growing risk of an intensifying questioning of the returns from soaring

AI capex in the US, particularly as the capex is increasingly financed by debt. Both the relative and

absolute performance of the hyperscalers’ share prices should be monitored closely. A sudden

realisation by investors that the hyperscalers will not be able to make a return on their AI-related

investments will trigger a sudden unwillingness to fund these investments.