METALS INSIGHTS : AAL, STRATEGY

研报英文原文证据摘录

METALS INSIGHTS : AAL, STRATEGY

ider Electric, STM and others standing room only. However, we felt investors, especially

those in the US, were underinvested here, with many hoping for a pullback to buy. At the same time, with some signs of froth and a

heavy IPO calendar emerging, AI bubble concerns have resurfaced, with the debate focused on whether we see a broadening out in

markets. On Europe, after last year's excitement, sentiment was subdued. While companies affirmed forthcoming defence spending,

delays in infrastructure spending plans plus French elections were concerns for investors, with many now preferring Japan over Europe.

Bringing it all together: the Strategy view - inflation the key banana skin for this cycle

Overall, corporate commentary corroborates our view of a resilient global economy, where inflation is the key risk . Last week's payroll

data reinforced our view, catalysing a momentum selloff, exacerbated by crowded positioning . Fed hikes are now likely, but only after

midterms. In the near-term, Warsh potentially conveying a dovish stance at the next Fed meeting should help, and a reopening of

Hormuz, if it materialises, would reduce near-term inflationary stress. Therefore tactically, we see the dip as an opportunity. The next

issue is US 10-year yields rising towards 5%, although we think that is likely a late Q3 risk. Meanwhile, for a broadening out of leadership,

a Hormuz deal is likely needed, with EU Banks our preferred play here. Overall, we remain overweight AI enablers (despite foreseeing

a period of consolidation), Renewable and Defence CAPEX winners.

Finally, a big thank you to investors, to whom we owe the success of our Conference. We look forward to seeing you again

next year!