The Chair of the US Federal Reserve, Kevin Warsh seems to be saying – stop looking to the Fed for forecasts and start focusing on the data.

Summary

Federal Reserve Chairman Kevin Warsh has inherited what many would argue is the most over-communicated institution in modern financial history. For much of the past decade, markets devoted as much attention to interpreting the Federal Reserve’s language, dot plots, speeches and forward guidance as they did to analysing the underlying economic data itself. Under Chairman Warsh, that dynamic appears to be changing.

In a world where economic indicators are often noisy, heavily revised and occasionally contradictory, the temptation for central bankers to over-explain and over-guide has been considerable. Warsh appears determined not merely to resist that temptation, but to reverse it altogether. Perhaps the most revealing aspect of this week’s FOMC meeting was his decision not to submit his own projections to the Fed’s “dot plot”, while encouraging other Committee members to continue doing so. This was no oversight. Warsh has repeatedly argued that dot plots are a flawed communication tool, that forward guidance can unnecessarily constrain policymakers, and that the Fed has spent much of the past decade over-promising and under-delivering on transparency. His absence from the projections was itself a powerful statement of intent. The message to markets was clear: stop looking to the Fed for forecasts and start focusing on the data.

Versailles has a complicated history when it comes to international agreements. It is therefore fitting that the newly signed U.S.-Iran accord should emerge from the same venue. The last truly consequential agreement signed at Versailles was the Treaty of 1919, celebrated at the time but viewed far less favourably by history. Whether the latest agreement proves more durable remains to be seen, but its geopolitical implications could be significant for both energy markets and investor sentiment.

There are also reasons to believe inflation may continue to ease without further aggressive policy intervention. Historically, Google searches for the term “inflation” have tended to peak roughly six months ahead of CPI readings. Search interest reached a five-year high in March, suggesting inflation could peak around September if that historical relationship holds. Our base case remains for an extended policy pause, with the first rate cut potentially arriving in October or December should inflation prove more persistent than expected.

The broader investment backdrop remains constructive. Economic growth continues to demonstrate resilience, inflation is gradually moderating, and the labour market, while slowing, is not showing signs of significant deterioration. The path towards an S&P 500 at 8,000 and a Nasdaq 100 at 30,000 is unlikely to be linear. Periodic corrections and extended periods of consolidation should be expected. Nevertheless, the longer-term outlook for risk assets remains favourable.

The Warsh Fed: Less Guidance, More Judgment

The U.S. Federal Open Market Committee (FOMC), under its new Chair Kevin Warsh, met this week and left the Federal Funds Target Rate unchanged at 3.75%.

The decision itself was not the most interesting part of the meeting. The statement was.

At just 162 words, it was the shortest FOMC statement since 2007. To find anything similarly concise, you would have to go back to the Alan Greenspan era in the early 2000s.

That brevity appears deliberate.

Warsh has inherited what many would argue became the most over-communicated institution in modern financial history. Over the past decade, markets often spent more time interpreting the Federal Reserve’s (Fed) ‘s language, dot plots, speeches, and forward guidance than they did analyse the underlying economic data.

The new approach seems to be the opposite.

Rather than pre-judging the economy, guiding markets toward a particular outcome, or signalling future policy moves months in advance, the Warsh Fed appears intent on restoring economic data as the primary signal.

The message is straightforward: Don’t look to us for clues about what comes next -look to the data. We will be doing the same.

It is a notable shift from recent years, when a single speech or phrase from the Fed Chair could move markets regardless of what the incoming data was saying. In a world where economic indicators can be noisy, revised, and sometimes contradictory, the temptation to over-communicate became overwhelming. Fed Chair Warsh appears determined to not just resist that temptation but to reverse that trend of overcommunication.

On data, he was equally direct: “Most of the data that central bankers consume come with old-fashioned survey methods – a national account of what the US economy looks like that looks very little like the US economy in 2026. Survey methods that don’t have response rates that we need, asking questions that might have been applicable a generation ago that are less applicable now.”

The Fed has been making trillion-dollar decisions with instruments built for a different economy. Warsh is saying that plainly and publicly. That alone is a departure.

There is something refreshing about a central bank that is trying to make itself less important and the data more important. I’d urge you to watch the full 45 minutes of the press conference.
It was brilliant.

US Federal Reserve Chairman Kevin Warsh at the FOMC press conference on June 17, 2026

Source: US Federal Reserve

The FOMC statement itself was a masterclass in saying very little. Growth was described as “solid.” Productivity was “strong.” Job gains had “kept pace.” Unemployment was little changed. Inflation remained “elevated,” though pressure was attributed largely to “certain sectors, including energy.”

On a natural language processing scorecard, the statement managed to sound both hawkish and dovish at the same time—either a feat of careful ambiguity or a document intentionally engineered to reveal as little as possible. I suspect it’s the latter and that was likely the point.

If the FOMC statement told investors almost nothing, the Summary of Economic Projections (SEP) told a rather different story.

The median FOMC participant now expects one rate hike this year. Core inflation is forecast at +3.3%, remaining above target not only this year but into 2027. Unemployment forecasts were revised lower, and the projected policy path for 2026 and 2027 shifted by a cumulative 50 basis points.

The dots, in other words, were hawkish.

Perhaps the most revealing detail was that Warsh himself declined to submit projections to the SEP, while encouraging other members to continue doing so.

That was not an oversight.

Warsh has repeatedly suggested that dot plots are a flawed communication tool, that forward guidance often boxes policymakers into commitments they later regret, and that the Fed has spent the past decade over-promising and under-delivering on transparency. His absence from the projections, was itself a statement of intent.

The message to the market was clear: Stop looking to the Fed for predictions about the future and start looking at the data.

That philosophy extended beyond the statement.

Warsh announced five task forces to review Fed communications, the balance sheet, data sourcing, productivity and labour market measurement, and the inflation framework. Notably, he ruled out reconsidering the Fed’s +2% inflation target before the reviews had even begun.

The task forces may be entirely genuine. They may also serve as the mechanism through which Warsh pursues a deeper institutional redesign of the Fed. My interpretation, however, is somewhat different. By sending major questions to committees and review groups, Warsh is signalling to existing FOMC members that he is not planning a sudden overhaul.

Nothing changes immediately. Everything goes through a process. That approach buys time, builds consensus, and reassures colleagues who may be wary of rapid change. If Warsh wants to reshape how the Fed communicates and operates, he will need the broader FOMC on side. Committees provide a way to move the conversation forward without forcing immediate decisions.

Viewed in that light, these announcements amount to something much larger than a routine policy meeting. They suggest a Chair focused not simply on interest rates, but on gradually reshaping the institution itself.

Forward guidance is being de-emphasised. Verbose statements are disappearing. The Chair has personally abstained from the dot plot. Internal reviews are underway across nearly every major aspect of the institution’s communication and analytical framework. This is not tinkering around the edges. It is a structural review of how the Federal Reserve thinks, speaks, and acts.

The irony is exquisite: The most significant shift in Fed communication philosophy in two decades was delivered in just 162 words.

Greenspan would probably have approved. The dot plot almost certainly would not have survived his tenure.

Less guidance, more judgment and more attention to economic data and less attention to central bankers trying to forecast the future.

After a decade in which markets often reacted more to Fed rhetoric than to economic reality, that may be the most important policy change of all.

The reporters gathered at Fed press conference were demonstrably frustrated that Warsh wouldn’t give them the forward guidance headline.

That frustration is precisely the point. Journalists who covered the Fed under Jerome Powell and Janet Yellen learned to listen for the coded signals, parse the adjectives, and write the market-moving headline.

Warsh is withdrawing that service. If you want to write about where rates are going, look at the data, build an argument, and write like an analyst. The Fed is no longer in the business of doing that work for you.

Welcome to a new Fed. Welcome to the Warsh Fed.

Markets and the Economy

Versailles has a complicated history when it comes to international agreements. It is therefore fitting that a new U.S.-Iran agreement has been signed there of all places.

The last truly famous document signed at Versailles was the Treaty of 1919. It was celebrated at the time. History has since delivered a rather different verdict..

This latest agreement is not technically a treaty but rather a Memorandum of Understanding (MoU). Investors may prefer to think of it as a Letter of Intent (LOI). The challenge, as always with LOIs, is determining what the real intent is and whether it ultimately translates into action.

For now, two immediate positives stand out: A reduction in geopolitical tension and the reopening of the Strait of Hormuz.

The latter matters enormously. Roughly a fifth of global oil trade passes through the Strait, making it one of the most strategically important waterways on earth. The first captain willing to sail a fully loaded container ship through Hormuz after the reopening deserves a trophy larger than the World Cup.

Longer term, however, I suspect the agreement may accelerate a trend that was already underway: A global reappraisal of security guarantees.

Over the next decade, I would not be surprised to see a significant increase in defence spending, including renewed debates around nuclear deterrence in countries that currently lack it. From East Asia to the Middle East, many U.S. allies will increasingly ask themselves whether external security guarantees are sufficient in an era of shifting geopolitical priorities.

The most memorable moment, however, came after the signing ceremony.

Trump finished signing. Macron leaned over and said, “Good job.” The room applauded.

Then Trump turned directly toward the cameras, made a deliberate hand gesture, and delivered his entire market assessment in four words:

“Oil down. Stocks up.”

That was it.

No lengthy diplomatic statement. No strategic doctrine. No detailed geopolitical analysis.

Just four words.

Whether one views him primarily as President, negotiator, or market participant, it was a reminder that Trump often sees world events through an investor’s lens – it was a reminder that Trump often sees world events through an investor’s lens. At that moment, the foreign policy briefing and the market commentary became one and the same.

Oil down. Stocks up. The Portfolio Manager-in-Chief had spoken.

US President Donald J. Trump signs the Iran Memorandum of Understanding, Versailles, June 17, 2026

Source: White House

SpaceX is now a public company. The company claims perhaps the largest actionable Total Addressable Market in history: $28.5 trillion.

The rockets, satellites and launch infrastructure are what made SpaceX famous. They also made Elon Musk one of the great innovators of our time.

But look closely at the numbers.

• Enterprise AI applications account for $22.7 trillion of the claimed TAM. That is roughly 80% of the total.
• Space itself—the business SpaceX is best known for—accounts for just $370 billion, or around 1.3%.
• Add Starlink broadband and mobile, and the businesses generating real revenue and profit today still represent less than 7% of the TAM being presented to investors.

In other words, if you are buying SPCX, you are not simply buying a rocket company. You are buying an AI enterprise software company that happens to own the world’s best rocket business.

That distinction matters.

The AI segment—xAI, X, Grok and Colossus compute – is currently losing around $6.4 billion a year. Starlink is the only profitable segment.

Source: SpaceX S-1 document for IPO, June 2026

The valuation is equally demanding.

At a $1.75 trillion valuation, SpaceX trades at roughly 70x forward revenue. For context, the median technology company trades around 3x, Tesla around 14x, and NVIDIA around 18x.

There is no question the company has extraordinary assets. Starlink has a powerful moat. Starship could change the economics of space. Grok reportedly has 117 million monthly active users and is scaling quickly. But the stock is asking investors to price a vast amount of future revenue today.

In June 2026, this is still a company losing $4.3 billion per quarter, with 80% of its claimed TAM tied to businesses that have little to do with rockets or satellites.

So, the question is simple: Is SPCX the next Mag 8 name, or the most spectacular amount of pixie dust ever packaged in a prospectus?

Let’s see where the stock is trading when various lockups start expiring from mid-August.

Turning to broader equity markets and looking at Indian equities which we don’t do much often in these pages unless I have a lesson to share.

When every investor is overweight the same story, ask yourself a simple question:
Who’s left to buy?

Two years ago, India was the world’s favourite equity market. Every institutional investor wanted exposure. The narrative was irresistible: demographics, digitisation, manufacturing growth, and the “China alternative.”

By mid-2024, MSCI India was trading at more than a 100% premium to the broader Emerging Markets index – the widest valuation gap versus Asia-Pacific peers in two decades.
Consensus was unanimous.
Then reality arrived.

MSCI India is down -4.4% year-to-date in 2026 and has delivered just +3.3% cumulatively across 2025 and 2026. It ranks last in the MSCI universe, with every major peer outperforming, some by more than 70 percentage points.

Global Equity Index Performance (2026 YTD and 2025-26 YTD)

For dollar-based investors, the picture is even worse. The rupee has fallen more than -9% against the dollar over the past year, turning a modest local-market decline into something much closer to a -15% drawdown.

So, what went wrong?

Arguably, very little.

India remains India. Bureaucracy has improved but remains burdensome. Reforms continue, but more slowly than hoped. Policy uncertainty still appears from time to time. None of this is particularly new.

What changed was the price investors were willing to pay.

At around 24x forward earnings—roughly 27% above its own long-term average -the market had already priced in near-perfect execution of a decade-long growth story.
Markets don’t reward stories. They reward positive surprises.

And when expectations become extreme, even good outcomes can disappoint.

As capital rotated into China’s recovery, AI infrastructure, and other emerging markets, India’s premium left investors with little margin for error.

The lesson extends far beyond India.

Narrative is not valuation. Consensus is not a margin of safety. And the most crowded trade rarely ends well.

India may still prove to be a generational investment opportunity. But a great story and a great investment are not the same thing.

The price you pay determines the return you get, not the narrative and not the consensus, and certainly not the slides in the pitch deck.

In the US, going back to 1930, every Federal Reserve Chair has seen stocks decline during the first three months of their tenure, including Eugene Meyer, who served through the depths of the Great Depression. The question now is whether Kevin Warsh will be the exception.

Recent developments may improve his odds.

President Trump announced the recent deal with Iran, and over the past four weeks, the economic data has painted a clear picture.

The U.S. economy remains resilient. Retail sales surprised to the upside, rising +0.9% in May.
The labour market remains healthy, with unemployment around 4.3% and jobless claims near historical lows.

Consumer sentiment has improved modestly as fuel prices eased.

The challenge remains inflation, with headline CPI back above+ 4% and the Fed’s own forecasts showing inflation remaining above target into 2027.

The economy is not weak enough to justify rate cuts today. But neither is it overheating enough to justify rate hikes.

That is why the growing discussion around further tightening looks misplaced.
Raising rates into an oil-driven supply shock does not solve the underlying problem; it risks slowing growth while having limited impact on the source of inflation.

The Fed made a major analytical mistake in 2021 by holding onto the “transitory” narrative for too long. The danger now is overcorrecting and tightening policy simply to prove that lesson has been learned.

There are reasons to believe inflation may cool on its own.

Historically, Google searches for “inflation” have tended to peak roughly six months before CPI. Search activity reached its highest level in five years in March (chart above). If that relationship holds, inflation could peak around September.

My base case remains unchanged. No rate hike and no rate cut at the next two FOMC meetings. The most likely outcome is a prolonged pause, with the first potential rate cut coming at the October meeting – or perhaps December if inflation proves more stubborn than expected.

For now, patience is the correct policy. The Fed’s job is not to react to every headline but to determine whether today’s inflation pressures are temporary or persistent.

Warsh’s first major test may not be whether he can defeat inflation. It may be whether he can avoid fighting the last inflation battle all over again.

Bottom line: Growth is still solid, inflation will cool opening path to at least one rate cut this year, and the labour market is bending, not breaking.

The journey to the S&P 500 at 8,000 and the Nasdaq 100 at 30,000 will not be linear. Periodic selloffs and extended sideways phases are inevitable along the way.

That’s precisely where equity structured products come into their own. Used thoughtfully, they are an effective way to navigate and potentially monetize-higher volatility. These strategies can offer partial capital protection, help define disciplined entry levels, and generate returns even when markets move sideways or pull back.

For tailored ideas, stock-specific structures, or deeper insights, please reach out to me or your dedicated relationship manager.

 
Best wishes,

Manish Singh, CFA

Extreme outcomes are easy to imagine and often dominate attention in uncertain times—but they rarely fully materialize.

Summary

The S&P 500 move since late February may be one of the clearest recent examples of a pattern inversion: Stairs down, elevator up. From the lows triggered by the Iran conflict, the index has now recovered to a fresh all-time high.

The biggest risk in this environment is not the market itself. It is the reaction to it. You do not need to predict volatility to build wealth. You need the discipline to stay invested through it. Every cycle carries its own narrative; the behavioural errors tend to be identical across all of them. Investors reprice fear too aggressively, exit at the wrong moment, and return too late.

What investors consistently get wrong is not the event, but the reaction function. The tendency is to focus on what should happen: markets should fall further, risks should be repriced more aggressively, geopolitics should matter for longer. But “should” reflects bias, not probability. Markets price the distribution of outcomes, not the most emotionally compelling one. Extreme scenarios dominate attention in periods of elevated uncertainty. They rarely play out in full. Meanwhile, the market adapts, discounts, and moves forward even when the underlying situation remains unresolved.

The recovery in equities has been notable, but not excessive.

Despite rallying more than +11% from recent lows, the S&P 500 is up only around +3% year-to-date. The NASDAQ has outperformed, rising approximately +17% from the lows and around +4% on the year. What stands out is the absence of positioning excess. A classic FOMO phase, characterised by aggressive inflows and broad retail participation, has not materialised. If geopolitical risk continues to fade and earnings hold, that phase may still be ahead of us.

Markets don’t wait for peace. They just move on

One year on from “Liberation Day,” the lesson remains as relevant as ever: Markets react violently to shocks – but they don’t stay there for long.

When President Donald Trump stepped into the Rose Garden on April 2 last year, the S&P 500 was already under pressure. Investors expected tariffs and expected near-term pain, but they also believed it would be manageable. The index closed less than -2% down that day, reflecting a consensus that the risk was understood and largely priced in. Within 48 hours, that assumption was shattered. The S&P 500 fell roughly -10%, not because tariffs were introduced, but because they were far more aggressive than anticipated. It wasn’t the event itself – it was the gap between expectation and reality.

Fast forward to today, and the parallels are striking.

In late February, if you had asked investors to model a scenario where the US and Israel attack Iran, retaliation spreads across the Gulf, drones and missiles strike major regional players, and the Strait of Hormuz effectively shuts down – collapsing ship traffic from around 130 vessels a day to single digits -the overwhelming consensus would have been clear. Equities would be down 20–30%, with a prolonged recovery ahead.

That’s not what happened.

S&P 500 and start of the Iran conflict (27/02)

Source: Bloomberg

The actual drawdown in the S&P 500 was closer to -9%, at its worst. Seven weeks on, the market is at a new all-time high. This is even though the conflict remains unresolved, tensions are still elevated, and oil prices have moved meaningfully higher.

This is the uncomfortable truth about markets: They don’t wait for clarity, and they certainly don’t wait for resolution. They reprice quickly, adjust positioning, and move on. The initial reaction is driven by fear and uncertainty, but once the worst-case scenarios are partially discounted and not immediately realised, markets stabilise far faster than expected.

We’re all familiar with the saying that markets “take the stairs up and the elevator down.” This time, it’s been the reverse (see chart above). As market structure evolves, so do the patterns. This may well be one of the clearest examples yet of stairs down, elevator up, with the S&P 500 now back at a fresh all-time high.

The biggest risk today isn’t the market; it’s how one reacts to it.

You don’t need to predict volatility; to create wealth, you need to have the behavioural resilience to survive it.

Every cycle feels unique, every risk feels unique and different, more often than not, the behavioural mistakes many make are the same old – reprice fear way too high, abandon and come back too late.

Don’t get scared out of your trades.

What investors consistently get wrong is not the event itself, but the reaction function. There is a tendency to focus on what should happen – markets should fall further, risks should be repriced more aggressively, geopolitics should matter for longer. But “should” is simply a reflection of bias. Markets don’t reward that. They price probabilities, not opinions.

Extreme outcomes are easy to imagine and tend to dominate attention, particularly in periods of heightened uncertainty. But they rarely play out in full. Meanwhile, the market is constantly adapting, discounting a range of outcomes and moving forward even as the underlying situation remains unresolved.

The implication is straightforward. If you remain fearful for longer than the market does, you are likely to miss the recovery. The objective is not to predict every shock, but to construct portfolios that can withstand them—protecting downside without sacrificing participation in the upside.

Different backdrop. Same conclusion.

Markets don’t wait for peace. They just move on.

Schrödinger Strait

In the thought experiment proposed by Erwin Schrödinger, the renowned physicist, a cat confined in a box is both alive and dead until the box it’s in is opened – a provocation meant to illustrate the peculiar logic of quantum mechanics. Applied, loosely to today’s maritime tensions in the Strait of Hormuz, the idea captures a disquieting truth: The Strait of Hormuz is at once open and closed.

Formally, if you believe both the US and Iran, the Strait has been restored to normal traffic. In practice, however, the picture is murkier.

Risk premia rise and fall with each incident. Tankers carrying oil and gas adjust routes, and schedules. Insurers recalibrate exposure and recalculate premiums.

Naval escorts (or blockades) become more visible. None of this amount to closure. Yet neither does it resemble normality.

The Strait exists in a condition akin to Schrödinger’s cat: Open in law, constrained in behaviour.

That said, such ambiguity is not accidental; it is instrumental.

For Iran the ability to unsettle the Strait without crossing the threshold of outright disruption, offers leverage at a tolerable cost.

For the US, the imperative is to deter escalation without overcommitting.

The result is a managed instability – volatile enough to command attention, contained enough to avoid catastrophe, “harmless” enough to give risk assets a relief and boost like we have seen over the last ten days.

Iran conflict and the region around the Strait of Hormuz

As one would imagine, the economic consequences are subtle but significant.

Energy markets price in probability rather than fact. Insurance costs, freight rates and hedging strategies all reflect a spectrum of possible outcomes, not a settled state. In effect, the strait’s uncertainty becomes a tax on global trade the longer it continues.

So far the market seems to think or at least believe a resolution is in sight. What it may get is another extension of ceasefire and not a final deal.

I was on CNBC earlier this week and as I said on the show, the present situation in the Strait is a ceasefire, not a solution. I do not expect a deal, I don’t think anyone does.
We will likely see an extension of the ceasefire.

For now, the Strait of Hormuz remains navigable. But it is no longer straightforward. Like Schrödinger’s cat, its status depends on perspective – simultaneously open and closed, stable and fragile.

The world may continue to trade through it. Yet it does so in a state of suspended certainty, where perception carries as much weight as reality.

As for President Trump and his recent posts and public statements, in my view he has lost a notable degree of support both at home and abroad since the conflict began. His tendency to alternate between provocative rhetoric and more conciliatory messaging, particularly on social media, doesn’t convey calculated unpredictability. Rather, it gives the impression of reactivity and uncertainty. From a strategic perspective, that’s a vulnerability others can exploit. A leader who changes tone frequently, reacts emotionally to unfolding events rather than shaping them, and resists informed counsel is unlikely to force meaningful concessions. More often, such a leader can be outmanoeuvred and outlasted.

Iran, for its part, doesn’t appear intimidated. If anything, it seems to have assessed the situation carefully and adapted. Leaders who respond to every news cycle are easier to read, easier to influence, and easier to wear down in negotiations. A deal will likely emerge—Iran has clear incentives, particularly around oil exports—but it may not be on the stringent terms Trump sought.

We can all rejoice when this is over, and S&P 500 scales to 8,000.

Markets and the Economy

Kevin Warsh’s confirmation hearing to lead the US Federal Reserve (Fed) began this week, before the Senate Banking Committee and while the nomination has cleared procedural hurdles, the path to full confirmation remains finely balanced.

The constraint is not ideological, but arithmetic. Republicans hold a narrow 13–11 majority on the Committee. However, Senator Thom Tillis (R-NC), has indicated he will block the nomination pending the resolution of a federal probe into outgoing Fed Chair Jerome Powell. Should Tillis join all 11 Democrats in opposition, the vote would deadlock at 12–12, effectively halting the nomination. Warsh advances only if Tillis abstains or votes “present” – a precarious position for a nominee expected to unify his own party.

Democrats, for their part, have shown little appetite to provide a path forward. Senator Elizabeth Warren (D-MA), has raised fresh concerns regarding Warsh’s ethics disclosures, particularly around potential conflicts of interest. His personal wealth – estimated between $131 million and $209 million – makes him the wealthiest nominee in Federal Reserve history, with holdings spanning private assets such as SpaceX, prediction markets like Polymarket, and cryptocurrencies. The optics alone ensure scrutiny will remain elevated.

Two parallel narratives are unfolding. The first is political: Whether Warsh aligns with the Trump administration’s preference for lower interest rates or maintains the Fed’s institutional independence. The expectation is that he adheres to orthodoxy, but the question itself will linger over the proceedings.

The second, and more consequential, is balance-sheet policy. Warsh has been a long-standing critic of the Fed’s $6.7 trillion balance sheet – the legacy of successive rounds of quantitative easing. His approach to unwinding that portfolio, and the implications for funding markets, liquidity, and financial stability, will be central. This is not a theoretical debate; it is one that will shape the cost and availability of capital for years.

Away from Washington, the more important macro development is unfolding quietly within the banking system.

After nearly two years of stagnation, U.S. bank balance sheets are expanding again. From January 2024 through late 2025, loan growth was either negative or running at its slowest pace since the aftermath of the Global Financial Crisis. That regime has now shifted.

Recent bank earnings flagged a clear reacceleration in both loan and deposit growth — a trend confirmed by the Federal Reserve’s H.8 data, which tracks commercial bank activity in near real time.

5-year chart: Percent change (YoY) in US Commercial and Industrial loans

The composition of that growth is critical.

Deposits are once again expanding, but unlike the 2020–21 period, this is not being driven by central bank liquidity. Then, balance sheet expansion was a byproduct of aggressive quantitative easing, with liquidity largely recycling into reserves and government securities. As policy reversed through quantitative tightening and higher rates, that excess liquidity was withdrawn.

Today, the mechanism is fundamentally different.

Deposit growth is now being driven by credit creation. Loan growth has accelerated meaningfully, with core lending expanding at an annualised pace of more than 8% over the past three months. Within that, commercial and industrial (C&I) lending has been particularly strong, running above 20% annualised.

This matters because C&I lending is directly linked to real economic activity – funding working capital, capital expenditure, and inventory accumulation. In other words, this is not passive balance sheet expansion; it is an active impulse to nominal GDP.

The implication is straightforward: Financial conditions may not be as restrictive as headline policy rates suggest.

The shift from liquidity-driven to credit-driven growth carries different market implications.
On the one hand, it is supportive. Strong credit creation sustains spending, investment, and earnings, reinforcing the current growth cycle and underpinning risk assets.

On the other hand, it raises familiar late-cycle questions. Credit expansions at this stage of the cycle often coincide with rising leverage and a gradual build-up of financial vulnerabilities — particularly when increasingly intermediated through private credit and less transparent channels.

The balance, for now, remains constructive. Liquidity is still growing, but it is being created endogenously by the private sector rather than injected by central banks. That is a powerful, but ultimately more fragile, form of support.

Against this backdrop, geopolitical risk remains elevated but is being treated by markets with characteristic detachment.

History provides a consistent pattern. Since the Attack on Pearl Harbor, major geopolitical shocks – wars, terrorist attacks, invasions – have triggered an initial drawdown in equities, typically in the range of 2–5% over the first month as uncertainty is priced.

What follows is more instructive.

S&P 500 performance after major geopolitical events

Source: ChatGPT

By three months, markets tend to stabilise and recover as clarity improves and policy responses emerge. By six months, gains often move into mid-to-high single digits. One year on, equities are typically meaningfully higher, frequently delivering double-digit returns as attention returns to earnings, growth, and liquidity.

The exceptions are equally revealing. The Yom Kippur War coincided with an oil embargo and a broader inflation shock, leading to a prolonged market downturn. Similarly, the aftermath of the September 11, attacks was compounded by an already weakening economic backdrop.

The lesson is clear: Markets are less sensitive to geopolitical events themselves, than to the macroeconomic conditions in which they occur.

Put differently, conflicts rarely derail equities unless they trigger something larger – an inflation shock, a recession, or a tightening in financial conditions.

The recovery in equities has been notable, but not excessive.

Despite a rally of more than +11% from recent lows, the S&P 500 is only up around +3% year-to-date. The tech-heavy NASDAQ has outperformed, rising approximately +17% from the lows and around +4% on the year.

What is striking is the absence of broad-based positioning excess. A classic “FOMO” phase – characterised by aggressive inflows and retail participation – has yet to materialise. That may yet emerge if geopolitical risks continue to fade and earnings remain resilient.

Global Equity Index Performance (2026 YTD, since March 30 to YTD and 2025-26 YTD)

US equities remain supported by a macro environment that is neither too hot nor too cold.

Growth continues at a modest pace, inflation has moderated significantly from its peak, and the labour market — at least on the surface — remains intact. This combination has underpinned the current rally and justified elevated valuations, particularly in quality growth and AI-linked sectors.

However, the underlying picture is more nuanced.

Growth has slowed from last year’s pace, hiring momentum has weakened, and a “jobless growth” dynamic is emerging. Inflation, particularly core, remains sufficiently sticky to keep the Federal Reserve cautious, maintaining a restrictive policy stance.

This creates a narrow path forward.

Earnings can continue to support markets if growth does not deteriorate sharply. But further valuation expansion becomes increasingly difficult in an environment where liquidity is constrained, and the cost of capital remains elevated.

The path to the S&P 500 at 8,000 and NASDAQ 100 at 30,000 remains intact, but it will not be linear. Periods of volatility, consolidation, and drawdowns are inevitable.

This is precisely the type of environment where structured strategies become relevant. Properly deployed, they allow investors to navigate volatility, define entry levels, and generate returns even in sideways markets.

The broader conclusion remains unchanged: Upside is intact, but increasingly dependent on earnings delivery rather than multiple expansion. Downside risks remain contained in the absence of a sharp deterioration in growth.

Staying long equities remains the core trade.

The next key inflection point lies externally. The upcoming Trump–Xi meeting in May will be critical, particularly for Chinese equities, which have lagged the global rally over the past two years.

For tailored strategies, stock-specific ideas, or structured solutions, please reach out to your relationship manager.

 
Best wishes,

Manish Singh, CFA

AI capex arms race continues to accelerate. The companies that build and supply compute will dictate access, pricing, and deployment speed.

Summary

Are Big Tech’s vast AI capital expenditure programmes laying the foundations for a genuine productivity surge, or sowing the seeds of the next bubble? Each new spending announcement still triggers reflexive comparisons to the dot-com era, yet those analogies increasingly miss the point. AI has transformed compute from a utility into a strategic asset. Strategic assets are never about shared access. They are about control.

The companies that build and supply compute infrastructure will dictate access, pricing, and deployment speed. Control the bottleneck and you control the economics of the entire ecosystem layered on top. That reality explains why the AI capex arms race continues to accelerate, and why simplistic bubble comparisons fail to capture the scale of what is unfolding. This is no longer about individual winners or losers. OpenAI’s eventual fate matters far less than the structural shift now underway.

The investment framework around capex is changing. Markets currently focus on hyperscaler margins and near-term free cash flow. That focus will move toward a more consequential divide: companies with secured compute access versus those forced to rent capacity, absorb hyperscaler margins, and operate with structurally higher costs. In an AI-driven economy, control of compute is not optional. It is decisive.

Against this backdrop, changes at the Federal Reserve and a renewed policy push toward deregulation and growth signal a potential inflection point for the US economy. A break from the long-standing 2–3% growth regime toward a more durable, productivity-led expansion now looks plausible. A 5% GDP quarter within the next year no longer feels far-fetched.

The Dow approaching 50,000 reflects this transition. It speaks less to narrow tech exuberance and more to a broadening rotation into banks, industrials, and consumers. Tech leadership may pause, but the baton is moving through the real economy before cycling back. That rotation does not signal risk aversion. It marks a bull market functioning as it should.

The Next Economy Runs on Compute – and Big Tech Knows It

Over the past three months, markets and geopolitics have been driven by a volatile mix of AI euphoria – and AI fear – alongside fiscal uncertainty and rising geopolitical risk.

Global equities have been repeatedly jolted by one central question: Are Big Tech’s massive AI capital spending plans, laying the foundations for the next productivity boom, or inflating the next capex bubble?

Each new spending announcement has been met with suspicion, with comparisons to the dot-com era drawn reflexively-even when those parallels feel increasingly forced.

This week’s catalyst came from comments by US investor Michael Burry, responding to Alphabet issuance of a 100-year bond.

Burry warned: “Last time this happened was Motorola in 1997.”

It’s a clever line – -but it rests on an outdated framework. The Motorola comparison says less about Alphabet’s fragility, and more about the limits of applying legacy tech analogies to a compute-driven world.

Source: Michael Burry on X

Motorola in 1997, was a one-product company riding a fading cycle, with no ecosystem, eroding pricing power, and distribution about to be commoditized.

Alphabet today is the inverse. It sits on over $120bn in cash, generates approximately $75bn in annual free cash flow, and saw more than $100bn of demand for a bond deal initially sized at $15bn. Even after expanding long-term debt to approximately $46.5bn, Alphabet’s debt-to-cash ratio remains comfortably below 0.5x.

This isn’t survival financing. It’s infrastructure financing.

The market is missing the bigger point. AI has turned compute into a strategic asset, not a utility. And strategic assets are never about shared access –they’re about control.

Alphabet isn’t issuing century debt because it’s desperate; it’s laying the rails of the next economic system. It could retire a meaningful portion of its debt tomorrow without breaking stride.

This is now a race for compute. Full stop.

The companies that matter most – Microsoft, Amazon, NVIDIA, and Google – won’t just supply compute. They’ll control access, pricing, and deployment speed. When you own the choke point, you own the economics of the ecosystem built on top of it.

This is why the AI capex arms race is accelerating — and why comparisons to past bubbles miss the scale.

Capex estimates for the Big Four hyperscalers – Microsoft, Meta, Alphabet, and Amazon – have surged to approximately $610bn for 2026, up from $359bn in 2025 (see chart below). That’s not incremental spending. That’s a structural reallocation of capital toward compute, power, and infrastructure.

For context, Bloomberg estimates that 21 of America’s largest industrial companies combined-including automakers, railroads, defence contractors, telecoms, logistics firms, Exxon Mobil, Intel, Walmart, and the companies formerly known as GE-will spend just $180bn on capex in 2026. Big Tech alone is outspending the rest of industrial America by more than 3x.

And before panic sets in, some perspective matters. Hyperscalers are currently reinvesting about 60% of operating cash flow into data centres and capex. Two years ago, that figure was 33%. From 2017–2022, it averaged 27%. Crucially, today’s spending intensity remains well below the 140% of cash flow telecom companies burned through at the peak of the 2001 fibre bubble.

As Brad Gerstner of Altimeter Capital put it: “Think of it as digging a gold mine. You have to spend a lot of money before you get the gold out. These guys are digging the biggest gold mine in the history of software. The real question is whether you believe Andy Jassy, Mark Zuckerberg, Sundar, and Jensen-or think there’s no gold at the bottom.”

That’s the trade. Either this is reckless overbuild-or the upfront cost of controlling the most valuable infrastructure layer of the next economy.

Today, markets obsess over hyperscaler margins and free cash flow. Tomorrow, the focus will be on companies without secured compute access-those renting capacity, inheriting hyperscaler margins, and operating at structurally higher cost.

The cloud worked when compute was cheap. AI has ended that era.

A tech re-rating is underway, but it won’t be uniform. Firms with genuine AI and infrastructure control will benefit disproportionately. Software remains in price discovery. European and emerging-market tech firms without compute ownership face structural de-rating risk. If you sit downstream of someone else’s infrastructure, your margins sit downstream too.

This isn’t about one bond deal-or even one company. It’s about who controls the machines the next economy runs on.

AI turns compute into a strategic weapon. And weapons, historically, are never about shared access.

They’re about control.

Most people are still operating on scarcity logic, in a world that has already moved on.

As those closest to the transformation keep reminding us, including Garry Tan, President & CEO of Y Combinator – what’s unfolding across AI, energy, materials, and biology is a shift from allocation to creation. Yet our political, economic, and cultural systems were built for a different era: Managing scarcity, negotiating slices, deciding who gets what and at whose expense.

They were never designed for exponential technologies that expand the pie faster than institutions can process. When those systems collide with abundance, they don’t recalibrate – they panic.

The failure is as much psychological as it is structural.

If you believe the world is zero-sum, abundance looks like instability. If you believe intelligence, coordination, and technology can scale together, abundance looks like the next stage of civilization.

Markets and the Economy

Before turning to the economy and equities, it’s worth outlining the market structure we are operating in—and likely to remain in for some time.

Markets feel far more volatile than they are- if you listen to headlines instead of price action. Or, to put it more precisely: Markets today are segmented, not contagious.

As Philosopher Heraclitus warned: “Much learning does not teach understanding.” We’re drowning in narratives but missing the signal.

Recent price action makes the point brutally clear. Silver has traded like a meme stock-surging from approximately $40 in September to over $120 in late January, then collapsing back below $65, including two -20% drawdowns in a single week. And yet, during that same stretch, the largest daily move in S&P 500 futures was just –1.2%, while a 9.3basis points (a basis point is 1/100th of a percent) drop in 10-year Treasury yields barely registered against far larger swings seen repeatedly over the past year.

Chaos in selected corners, calm everywhere else.

This disconnect reflects a defining feature of modern markets: Liquidity is everywhere for small positions, but balance-sheet risk is nowhere for big ones.

Years of asset inflation, from equities to housing to crypto, has created a powerful wealth effect, and empowered retail but regulation has stripped institutions of the ability (and incentive) to warehouse risk. The giants that once tied markets together- Dot-com era equity desks, pre-Global Financial Crisis Mortgage-Backed Securities machines- are gone. Price discovery now happens fast, violent, and local.

There are casualties, but they arrive early. As Philosopher Friedrich Nietzsche put it, “What does not kill me makes me stronger.” Rapid price discovery prevents bubbles from metastasizing into systemic threats. Losses are real, but they’re contained-and instructive.

Crypto markets show this most clearly. Heavily leveraged traders are auto-liquidated en masse, clearing positioning in hours, not months. The market goes vertical on the way down-and often rips higher once excess leverage is flushed. Painful? Absolutely. Systemic? No. These losses act as circuit breakers, not accelerants.

Contrast this with the globalization era, when shocks cascaded across borders and balance sheets-from subprime mortgages to sovereign debt crises. Today’s structure does the opposite: it absorbs shocks rather than transmits them.

Even volatility itself is telling the story. The VIX has averaged around 17 over the past six months (see chart below), and repeated spikes into the low 20s have failed to spark broader stress-much to the frustration of those still waiting for the long-anticipated equity reckoning.

Conclusion: Volatility is no longer a warning siren- it’s a sanitation mechanism. Big moves don’t signal growing macro danger; they signal risk being cleared. The calm in the S&P 500 amid violent swings elsewhere isn’t complacency-it’s evidence that today’s market system contains risk rather than denying it.

The VIX index – 6-month price chart

Source: Bloomberg

Over a month ago, I wrote a post – “Let’s talk about Kevin” and made a case for why former member of the US Federal Reserve (Fed) Board Kevin Warsh will be the next Fed chair.

Just over a week ago, President Donald Trump formally appointed Kevin Warsh to be the next Chair of the US Fed subject to confirmation hearing by the Senate.

The nomination of Kevin Warsh as Fed Chair has refocused attention on how deeply the Fed is embedded in markets. Warsh has long argued that the Fed’s footprint-still approximately $7.5 trillion-is too large, not just in asset holdings but in blurred lines between monetary and fiscal policy and an overbearing communications regime that shapes investor behaviour.

A Warsh-led Fed is unlikely to change the near-term rate path, but it could gradually shift balance sheet strategy.

Any meaningful shrinkage, however, is constrained by structurally high bank demand for reserves (still above $3 trillion). Move too fast, and funding markets break-something the Fed learned the hard way in 2019.

To understand the direction of travel, it’s worth reading-and re-reading The Wall Street Journal op-ed Warsh co-authored with Stanley Druckenmiller last June: “ The Asset-Rich, Income-Poor Economy ”  It offers a clear preview of what may be coming next.

Warsh and Druckenmiller argued – higher asset prices are not translating into meaningful increases in capital expenditures, and the weak growth in business investment is proving to be an opportunity-killer for workers.

Balance-sheet wealth is only durable when it stems from earned economic success rather than government stimulus or financial engineering. True wealth creation requires productive growth – where labour, capital, and innovation raise productivity, converting income into savings, savings into investment, and investment into lasting assets.

Today, the US shows a widening gap between asset-driven balance-sheet gains and income growth that benefits the broader population: many households lack stock ownership or housing wealth, retirees face weak bond returns, and employment recovery has lagged population growth, driving high non-participation.

Meanwhile, corporate incentives favour debt-funded buybacks over long-term investment, rewarding short-term asset inflation instead of productive risk-taking.

The result is rising asset prices alongside subdued ~2% real growth, weak business investment, slower wage gains, and below-trend productivity. Without stronger investment in productive capacity and people, prosperity will remain fragile and uneven – though sweeping deregulation and economy-wide growth initiatives could mark an inflection point toward more durable, productivity-led expansion.

“The Powell Fed has failed to get interest rates about right for most of Chair Powell’s tenure.”
– Kevin Warsh, Oct 12, 2025

“What we need to do is examine the entire Federal Reserve institution and whether it has been successful. All of these PhDs over there-I don’t know what they do. This is like a universal basic income for academic economists.”
– US Treasury Secretary, Scott Bessent, July 21, 2025

Both Bessent and Warsh are aligned on the need for urgent Fed reform. That process is likely to begin as Powell’s term ends on May 15, 2026- or sooner, should he step aside.

A broader agenda of major deregulation, reduced red tape, and growth driven by the full breadth of the US economy-not just Wall Street and tech-could mark a defining inflexion point. If executed well, it may finally lift the US out of its long-running 2–3% GDP growth rut and toward a more durable, productivity-led expansion.

This is something to be really excited about. I will not be surprised if we see +5% GDP growth quarter at some point over the next 12 months.

Bottom line: Fed Chair Warsh wouldn’t pull the Fed out of markets overnight-but he’d push toward a smaller, quieter central bank, slowly and within tight plumbing constraints to engender better GDP growth.

The Dow Jones Industrial Average hit 50,000 for the first time on Friday.

The Dow hitting 50,000 is less about tech euphoria and more about a quiet rotation into the real economy. Over the past six months, the Dow has outperformed both the S&P 500 and the Nasdaq, as investors trimmed crowded AI trades and rotated into banks, industrials, consumer staples, and transport stocks.

Global Equity Index Performance (2026 YTD, since Jan 20 to YTD and 2022-26 YTD)

While the Nasdaq has been choppy and flat-to-down amid software and AI volatility, and the S&P 500 has delivered modest gains, the Dow has surged-helped by standout performances from names like Walmart, Johnson & Johnson, and Coca-Cola.

At the same time, emerging markets have kept pace or beaten US tech-heavy indices, benefiting from cheaper valuations and a weaker dollar narrative.

The market’s message is clear: this rally isn’t just tech beta-it’s a vote of confidence in reaccelerating US growth, which is good news for both the broader economy and US equities.

Tech may pause and consolidate, but the baton is being passed to the real economy-banks, industrials, transports, and consumer staples-before ultimately rotating back to tech. That handoff, from innovation to picks-and-shovels and back again, isn’t a risk-off signal. It’s a sign of a healthy, durable bull market doing exactly what it’s supposed to do.

A few thoughts on US GDP growth-and yes, try not to laugh.

“If our new head of the Fed [Kevin Warsh] does the job he’s capable of, we can grow at 15%-maybe more.” That was Donald Trump speaking to Fox News on February 9, 2026.

Fifteen percent is…ambitious. I’m not sure the economy-or anyone’s spreadsheets-are ready for that.

Personally, I’d be more than satisfied with +5% real GDP growth, a level the US hasn’t sustained in over two decades, excluding the post-COVID rebound distortions. Even getting close would be meaningful.

That said, the data are moving in the right direction. The Atlanta Fed’s GDPNow model is tracking +4.2% growth for Q4 2025, putting full-year GDP north of +3%-not fantasy numbers, but strong momentum by modern, post-GFC standards.

US inflation is also behaving better than feared. December CPI rose +0.3% m/m, with headline inflation at +2.7% y/y and core inflation at +2.6%. Importantly, inflation psychology is cooling too: the New York Fed’s consumer survey shows 1-year inflation expectations easing to +3.1%, down from +3.4%.

The US consumer is slowing but not cracking. US Retail sales were flat m/m in December, and core sales dipped -0.1%, pointing to moderation after a strong run rather than outright retrenchment.

Meanwhile, the labour market is cooling in a healthy way. US Payrolls rose 64,000, US unemployment rate sits at 4.6%, and US wage growth remains around 3.5% y/y. Slower hiring alongside steady wages fits a late-cycle but intact expansion-not an economy rolling over.

Bottom line: Growth is solid, inflation is cooling, and the labour market is bending, not breaking.

The journey to S&P 500 at 8,000 and Nasdaq 100 at 30,000 will not be linear. Periodic selloffs and extended sideways phases are inevitable along the way.

That’s precisely where equity structured products come into their own. Used thoughtfully, they are an effective way to navigate-and potentially monetize-higher volatility. These strategies can offer partial capital protection, help define disciplined entry levels, and generate returns even when markets move sideways or pull back.

For tailored ideas, stock-specific structures, or deeper insights, please reach out to me or your dedicated relationship manager.

 
Best wishes,

Manish Singh, CFA

The US’s new tariffs have shaken up the global economy – but the AI boom is helping to hold things together

Summary

If two words were to define 2025, they’re tariffs and artificial intelligence. President Trump’s “Liberation Day” tariffs initially sent shockwaves through global markets. Economists warned of a sharp hit to trade, corporate margins, and global growth. Yet the anticipated recession never arrived. Instead, the S&P 500 is up over +16% year-to-date, and the Nasdaq has gained more than +20%, extending a powerful run driven by structural forces beneath the surface.

The reason? While tariffs tightened parts of the system, the AI boom expanded others. Corporate earnings have held up, risk appetite has returned, and productivity optimism is rising. Many of the most aggressive tariffs were ultimately scaled back or delayed – but AI’s momentum hasn’t paused. Markets are adjusting not to a collapse in global trade, but to a recalibration of where and how future growth will emerge.

AI is now being recognised as a true general-purpose technology — with potential long-term productivity gains of +1.5% to +3% annually. As compute costs decline and adoption accelerates, the path to profitability becomes clearer. Challenges remain: Tariff-linked inflation, fiscal drag, slower AI capex, or geopolitical shocks could all weigh on sentiment.

But the clear lesson from this cycle is that structural tailwinds have consistently outpaced short-term noise. Staying invested – especially through periods of technological transformation – remains the most effective strategy for compounding long-term wealth.

Tinsel, Trust, Tail Risk, & AI: The Markets Hidden in Christmas Classics

It’s almost that time of year again – market activity is slowing down, Radio Times in hand, and the annual ritual of deciding which Christmas movies to watch over the holidays. We all have our favourites: It’s a Wonderful Life, A Christmas Carol, Home Alone, Love Actually, and in my daughter’s case, The Grinch (the 2018 Pharell Williams version).

Christmas movies often feel like warm, nostalgic escapes from reality – but look closely and many of them are built on themes straight out of financial markets: Risk, fear, liquidity crunches, moral hazard, irrational behaviour, asset bubbles, and the psychology that drives economic cycles.

It’s a Wonderful Life — Liquidity Crunches & Bank Runs

George Bailey’s Building & Loan is a textbook lesson in liquidity risk: Long-term assets, short-term liabilities, and a sudden loss of confidence that sparks a classic bank run. A reminder that markets run on trust — until they don’t.

A Christmas Carol — Behavioural Finance in Victorian Clothing

Scrooge is the original case study in loss aversion, hoarding, and over-saving at the expense of utility. The ghosts force him to confront future regret — essentially a crash course in long-term forecasting and behavioural incentives.

Home Alone — Risk Management & Tail Events

Kevin McCallister is an 8-year-old master of scenario analysis. He anticipates threats, allocates resources smartly, and creates asymmetric defences with limited capital. It’s tail-risk hedging… through marbles, nails, and paint cans.

The Santa Clause — Succession Risk & Governance Failures

Santa quite literally falls off the roof, and leadership transfers via a poorly drafted contractual clause. It’s corporate governance gone wrong — unclear terms, no oversight, and no succession planning.

The Grinch — Overconsumption & Sentiment Cycles

Whoville thrives on relentless consumption, leaving it vulnerable to a collapse in demand. The Grinch’s theft is a sentiment shock, showing that an economy built purely on cheer is only as strong as its confidence levels.

Well, we are not going to just talk about movies, so let’s look at the state of the market.

If 2025 can be summed up in two words, they are: Tariffs and Artificial Intelligence (AI).

The US’s new tariffs have shaken up the global economy – but the AI boom is helping to hold things together.

When US President Donald J. Trump rolled out his “Liberation Day” tariffs in April, many economists warned of a global shock. The consensus predicted US import slowdowns would choke global supply chains, hurt exports, stunt growth, and cost jobs around the world.

The AI infrastructure buildout is pulling the US economy up

Yet, months later, some of those same economists are revising their growth forecasts upward. Despite the tariff barrage, there’s been no recession, and markets are holding firm. The S&P 500 is up almost +16% year-to-date, while the Nasdaq Composite has surged more than +20%, building on two straight years of nearly +20% annual returns.

That resilience isn’t just luck – it reflects confidence in the AI-driven growth story, the resilience of corporate earnings, and a broader recalibration of risk across global capital markets.

In light of this, it’s often wiser to stay invested than to try to “time the market.” Trying to guess when markets will correct — pull out some money — and then jump back in is a high-stakes game. Instead, riding the upward trends, especially when structural themes like AI are driving value, tends to reward long-term discipline.

As Trump himself put it when defending the tariff strategy back in Spring: “We’re putting American workers and American innovation first.” Whether one agrees or not, the market seems to be voting with its capital — at least for now.

In short: Tariffs tightened one valve, but AI blew another wide open.

Global Equity Index Performance (2025 YTD, since April 4 YTD and 2022-25 YTD)

Last December in looking forward at 2025, I wrote:

“U.S. Equities Set for Uptick: Predicting specific figures is challenging, but U.S. stocks are well-positioned to see a rise of approximately 10-15% over the next year.”

I’d predict another double-digit year for 2026 for the S&P 500, as rates normalise and the job market improves. With a new Fed Chair in place probably by end of Q1, the year will be driven by robust growth, as inflation fear recede.

As for the next Fed chair, Polymarket gives Kevin Hassett a 74% chance of becoming the next U.S. Federal Reserve Chair. Hassett, Director of the National Economic Council since 2025, previously chaired the Council of Economic Advisers (2017–2019) and was a scholar at the conservative American Enterprise Institute. He has published widely on tax policy, growth, productivity, and macroeconomics.

In short, he is not a career central banker or regulator. His background is primarily that of an economic adviser, academic policy expert, and advocate for tax and growth-focused policies—experiences that strongly influence his economic philosophy and worldview.

If Hassett were appointed Fed Chair, his background and philosophy suggest several probable tendencies:

• Focus on growth and productivity, not just cyclical stabilization. He might push the Fed to consider structural growth and long-term output potential as part of its mandate.
• Balanced monetary policy. Rather than swing widely between aggressive rate hikes and rate cuts, he might favour a more measured, long-horizon approach — especially if underlying growth and productivity remain resilient.
• Coordination (or at least compatibility) with pro-growth fiscal policy. Given his history of advocating for tax reform and deregulation, he may prefer monetary policy that stabilizes inflation while giving the private sector room to invest and grow.
• More predictable, less politically reactive style. Coming from a policy-adviser and academic background, Hassett may favour rules-based or transparent frameworks over short-term discretion.

All this bodes well for risk assets.

On another note, Japan is coming up for discussion given its large pile of debt and rising inflation. It is also coming up in news for another reason – Trump called Prime Minister Sanae Takaichi last month, and advised her not to provoke Beijing on the question of Taiwan’s sovereignty.

Let me address the two issues – debt and inflation, and Taiwan, one at a time.

On debt, inflation and rising Japanese Govt bond (JGB) yield the central claim of a viral post “Japan printed money for 30 years and exported it to keep mortgages cheap, stocks inflated, and governments solvent,” is false and misleading.

Japan’s global financial strength comes from decades of persistent current account surpluses, not money printing. Its Net International Investment Position—around $3.4 trillion and ~80% of GDP—makes it one of the world’s largest creditor nations, alongside Germany.

Recent JGB movements reflect normal market dynamics, like reduced BoJ purchases and changing domestic investment needs, not economic collapse.

Myths about Japan or China dumping U.S. Treasuries are illogical, as it would destroy their own portfolios.

Doom narratives persist because fear sells, but Japan remains a rich, stable, globally integrated economy. Rising interest costs are manageable relative to nominal growth, and warnings of collapse are often biased and superficial.

30-Year Japan government bond (JGB) yield: 30-year price chart

Source: Bloomberg

On the topic of Japan’s growing support for Taiwan, it behoves the new PM to be more careful as it cannot count on US unconditional support under President Trump or the next resident of the white House.

There’s an old strategic truth worth revisiting: The decline of your patron is far more lethal than the rise of your rival.

Japan is more at risk from losing its patron – the US than from the rise of its rival China.

For decades, the US has been the world’s ultimate stabiliser – the patron state underpinning global security, trade, and financial architecture. Its consumer market absorbed global exports; its dollar anchored the monetary system; its military and diplomatic presence kept regional tensions from spiralling.

A rival’s rise – whether China, India, or any emerging power – is disruptive but manageable. The system can adjust to new competitors. Markets can reprice. Supply chains can evolve.

But the weakening of the anchor power?
That’s a different order of risk and needs to be responded with urgency.
Arguably, Prime Minister Takaichi has the toughest job of all the world leaders.

A rival adds pressure. A patron’s decline shakes the foundation and forces you to get off your back and become more proactive, creative, thoughtful and think anew.

As the world edges toward a more multipolar, more uncertain equilibrium, this asymmetry is becoming harder to ignore – in markets, in geopolitics, and in boardrooms.

The question for 2026 and beyond isn’t simply who is rising. It’s what happens if the system’s cornerstone begins to slip.

Former British Prime Minister Winston Churchill once said – “Peace is made secure not by the balance of forces, but by the strength of the strongest.”

With the US slipping, its priorities changing, the part of the globe that relied on US support, needs to rethink its strategy.

Looking Ahead: 2026–2027

The combination of tariffs and AI-driven investment is shaping not just 2025, but potentially the next several years of the economic cycle.

AI once grew more expensive, as models scaled, but efficiency gains have flipped that logic. Intelligence that cost $37 per million words in 2023 now costs only a few cents, thanks to faster chips, smarter code, leaner models, and open-weight competition. This cost collapse means every dollar now buys far more capability, accelerating adoption. Nvidia sits squarely at the centre: The NVL72 Supercycle—jumping from 8 GPUs per server to 72—is setting up multiple quarters of blowout results and could become one of the biggest tech cycles since the iPhone.

Tech adoption is also happening faster than ever. The flush toilet took 75 years to go mainstream; the smartphone took 10. Generative AI is on track to break every record. Roughly 40% of U.S. households already use AI at work or home, just two years after ChatGPT launched, and effective adoption rates may be far higher once embedded AI is included.

I believe that search behaviour will increasingly shift from traditional queries to AI chatbots. As ChatGPT releases a far stronger model trained on NVL72 Blackwell clusters at Microsoft, sentiment will swing back in its favour. Nvidia will benefit from this training wave, while fears that Google’s TPUs will meaningfully threaten Nvidia’s dominance remain overstated.

This shift will also hit digital advertising. A large share of ad spend will migrate from search engines to AI chatbots and emerging AI-native hardware. Google, long protected by its search monopoly, will face real competitive pressure, as user attention moves into conversational interfaces.

Inside companies, productivity gains will accelerate. AI is moving from “co-pilot” to “co-worker.” Knowledge workers will become dramatically more efficient as models adapt to proprietary data and custom workflows. Surveys show over 40% of firms already pay for AI services, and adoption is rising fastest across tech, finance, and professional services.

Barriers exist – regulation, legacy systems, tight budgets – but the shift from experimentation to deployment is unmistakable.

AI is the next great “general-purpose technology,” akin to electricity or the computer. Most economic estimates point to +1.5%–+3% annual productivity gains over the next decade—transformative in a world with slowing labour-force growth. The upside is huge, even if the full effect takes time to materialize. Profitability concerns are temporary. Compute gets faster and cheaper every year, and this trend is relentless. As costs fall and usage scales, today’s loss-making AI features will turn into highly profitable businesses.

At the economy level, the US economy remains supported by strong earnings, pro-growth policies, active capital markets, and ongoing AI investment—benefits that are likely to ripple across global sectors. The major AI stock rally may still be ahead, potentially mirroring the trajectory of Netscape’s 1994 launch. So far, the pattern is strikingly similar (chart below).

That said, the equity markets are broadening. Leadership is moving beyond the AI mega-caps to companies building AI’s physical backbone and those set to benefit from sector rotation.

International and small-cap stocks are gaining appeal, fuelled by fiscal stimulus and improving global cyclical trends.

AI-related investment—spanning cloud infrastructure, chips, data centres, and automation—could drive double-digit earnings growth in large-cap tech through 2026.

Early enterprise AI adoption, highlighted by big tech CEOs in recent media appearances, points to a productivity surge not seen since the late 1990s. Coupled with re-shoring and structural investments in manufacturing, energy, and semiconductors, this makes annual S&P 500 gains of around +10% plausible, with the Nasdaq poised to lead.

Expansionary policies outside the US, especially in Germany, have been swift and significant. Aggressive easing by the European Central Bank, Bank of England, and emerging-market central banks further supports international equities.

Small caps stand to benefit the most as markets broaden beyond mega-cap tech and rates cuts in the US follow. Even modest flows away from the “Magnificent Seven,” could boost smaller stocks, which also thrive in lower-rate environments.

U.S. fiscal stimulus – including tax incentives for capex – backs growth, but policies like tariffs and immigration restrictions remain inflationary. With inflation near or above 3%, bonds may underperform, reinforcing equities as the preferred play.

I am a buyer of crypto – Bitcoin, Solana, and Ethereum. I view gold more as jewellery, though it still deserves a role as a portfolio hedge for when geopolitical risk become concern. I’m less convinced by illiquid private assets and believe structured equity investing, as we practice it, offers a better risk-adjusted path to generating 10–12% on an equity allocation.

History shows that market leadership always evolves over time and revolve around themes.
None of the top 10 companies by market cap in 1975 remain in the top 10 today, and even from 2005, only Microsoft survives in the top 10 today.

Times for significant technological disruption tend to disrupt moats, we are in midst of it, but big tech has a big lead and over time they have consolidated their monopolistic position.

From Oil Titans to Tech Giants: Top 10 US Companies, 1975 vs 2025

Source: ChatGPT

What could disrupt all the positivity? Tariff-driven inflation, AI spending slowdowns, U.S. fiscal stress, and geopolitical shocks.

However, the lesson from 2023–2025 is clear – staying invested has consistently outperformed attempts to time the market, as structural themes like AI reward patience over precision. Time in the market, especially during technological inflection points, remains the most reliable path to long-term gains.

Markets aren’t just numbers – they’re stories about people navigating uncertainty, emotion, ambition, fear, and hope.

Never forget – investing is less about predicting the future and more about understanding human behaviour. And few things illustrate that better than the Christmas classics we return to every December. Because those movies beneath the sparkle and nostalgia, explore those same forces far more honestly than most investment textbooks or newsletters ( with possible exception of this one, I know I am biased)

Wishing you and your loved ones a joyful holiday season and a prosperous New Year. For those celebrating Christmas, may it be a wonderful celebration full of warmth and joy.

 
Best wishes,

Manish Singh, CFA

“Scepticism often spikes at the top — but it also tends to keep investors from participating in ongoing structural shifts.”

Summary

Investor scepticism tends to peak when markets are making new highs. But history shows that doubt alone doesn’t protect capital — it often sidelines it. Even the most seasoned investors can misread complex market cycles. The real challenge is not being wrong – it’s refusing to adapt. As Marcel Proust observed, “The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.” That’s increasingly true in today’s market. The advantage now belongs to investors who can look at familiar conditions with a fresh lens, not those clinging to outdated assumptions.

As headlines warn of market froth, institutions are positioning for a multi-decade transformation. JPMorgan’s CEO may express caution publicly, but the firm is committing over $10 trillion to future-focused sectors – AI, quantum computing, and cybersecurity. It’s a clear signal: beneath the noise, capital is flowing into the technologies reshaping global growth. Corrections will come – they always do — but history has consistently rewarded those who stay invested, manage risk, and evolve with the cycle rather than exit it.

Digital assets, meanwhile, continue to offer rare optionality — asymmetric return potential, innovation at the edge, and exposure to structural change. But fundamentals still apply: Disciplined sizing, risk management, and cycle awareness. Bull markets may flatter, but true investing skill is proven through drawdowns. As Warren Buffett reminds us, “Only when the tide goes out do you discover who’s been swimming naked.” In crypto, that tide moves quickly – and often. Staying solvent, informed, and opportunistic will matter more than ever.

From Tariff panic to Tech Euphoria

US GDP surged +3.8% in Q2, up from the earlier +3.3% estimate, marking the strongest growth since Q3 2023.

The engine? Robust consumer spending and a surge in AI-driven tech investment.

As one prominent Wall Street analyst quipped, “Without tech spending, the U.S. economy would be close to recession.”

I always smile at these “without” GDP analyses — they miss the point.

Is Superman still Superman if he can’t fly? Is James Bond still Bond without his gun? Or Taylor Swift still Taylor Swift without her songs?

Technology is the US economy — its defining strength and the envy of the world.

Without it, America would resemble the Eurozone — minus the cheese, the wine, and perhaps with a few too many guns.

But let’s add some perspective.

In December 1981, when recession fears were thick in the air, the Blue-Chip Economic Indicators survey showed forecasts for 1982 ranging from +4.0% growth to a –1.7% contraction, with profit expectations swinging between –19.9% and +19%.

The consensus gloom proved misplaced: The economy rebounded sharply, ushering in the Reagan-era boom. Back then, there was no AI revolution to lean on — just tight monetary policy, an inflation fight, and a resilient private sector.

History reminds us that forecasts are guesses wearing ties, and humility is the economist’s most underrated skill.

Early October gave investors two big milestones — and a reminder of how fast sentiment can shift. October 8 marked six months since the “tariff crash” bottomed, while October 12 celebrated three years since the current bull market began in late 2022 — just before the AI revolution transformed everything.

”Liberation Day” tariffs market collapse now feels like a distant memory. The S&P 500 plunged -10% in two days amid tariff panic, falling nearly -19% from its February’s highs. Yet, true to form, markets recovered with stunning force. Since those April lows, the S&P 500 has surged +34% (see chart below), while the Nasdaq 100 — boosted by AI, semiconductors, and data-centre exuberance — has rocketed almost +50%.

Global Equity Index Performance (2025 YTD, since April 4 YTD and 2022-25 YTD)

Step back further, and the numbers tell an even bigger story. Since the October 2022 bear-market bottom, the S&P 500 has climbed nearly +90%, and the Nasdaq 100 over +125% — one of the most powerful recoveries in modern market history.

It hasn’t been a straight line, though. The rally has seen three full-blown corrections over 10% across the S&P, Dow, and Nasdaq:

• October 2023: A -10% drop driven by inflation and rising yields.
• July–August 2024: A 10–12% pullback on recession fears.
• March 2025: A -13% slide amid Trump’s tariff shock and China’s retaliation.

Each dip sparked new waves of doubt — and each has been followed by record highs. As the bull enters its fourth year, scepticism is rising again, with the word “bubble” making the rounds. Yet it’s often when investors grow most certain of doom that markets climb higher.

Scepticism often spikes at the top — but it also tends to keep investors from participating in ongoing structural shifts.

Even market legends stumble here: Paul Tudor Jones warned in May that stocks would fall “to new lows.. even if Trump dials back China tariffs by 50%.”

At the time, the S&P 500 stood at 5,606. Today, it’s above 6,700

Markets are complex systems — rarely obeying clean narratives or linear logic. The costliest mistake isn’t being wrong; it’s staying wrong because ego overrides evidence.

As JPMorgan’s CEO Jamie Dimon sounds alarms about “market froth,” his bank is simultaneously pledging $10.5 trillion towards long-term US. economic renewal — investing in AI, quantum computing, and cybersecurity.

The paradox is clear: While many worry about bubbles, institutions are preparing for the next decade of transformation.

The labour market, while still resilient with unemployment around +4.2–4.3%, has softened at the edges. The ADP report showed private payrolls falling 32k in September, the weakest print since March 2023, with August’s gain revised down sharply. With the Employment Situation Report delayed by the government shutdown, that weak ADP reading makes October rate cut of 25bps next Wednesday a formality.

Inflation remains sticky but cooling — headline CPI at +2.9%, core around +3.1% — keeping the US Federal Reserve (Fed) cautious but aware that credit conditions are tightening and growth momentum is fading. The Fed’s data-dependent approach means it will follow the labour signals more than the rhetoric, and on current trends, a 50bps rate cut before year-end wouldn’t surprise me at all.

As the chart below shows, the 10-year U.S. Treasury yield (USGG10Y), typically moves in lockstep with the 2-year yield (USGG2Y), as one would expect, and generally trades above the Fed funds target rate (FDTR).

US Treasury 10-year yield (USGG10Y), 2-year yield ( USGG2Y) and Fed fund target rate (FDTR) – 15-year price chart

Source: Bloomberg

Today, however, the 10-year yield sits firmly below the policy rate — the bond market’s quiet way of signalling that it expects the Fed to cut rates more deeply, and soon. That shift in expectations tends to be supportive for equities, particularly small-cap and growth stocks, which are most sensitive to falling rates and an improving liquidity backdrop.

Markets need both optimism and fear to function. Bulls and bears, in a sense, should thank each other. Because without that tension — that push and pull — there would be no market at all.

Yes, this bull market will correct — all of them do. But history has been far harsher on sideline-sitters than on disciplined investors who adapt rather than abandon.

There’s a difference between being cautious and being paralyzed. The intelligent approach is to stay invested, manage risk, and evolve with the cycle, not against it.

Structured products and adaptive strategies remain essential tools for balancing participation and protection.

Markets need both optimism and fear to function. Bulls and bears, in a sense, should thank each other. Because without that tension — that push and pull — there would be no market at all.

The AI and frontier-tech boom will one day slow — but it’s still shaping the next generation of growth. For investors, the key is to stay on the field, not in the stands.

“The real voyage of discovery,” Marcel Proust wrote, “consists not in seeking new landscapes, but in having new eyes.”

The same applies here. The future of investing will belong not to those who predict perfectly, but to those who can see the same market — through new eyes.

Markets and the Economy

The US federal government has been shut down since Oct 1, 2025, after Congress failed to pass a 2026 funding bill amid deep partisan rifts over spending, foreign aid, and healthcare. Now in its 22nd day, it’s the third-longest shutdown in US history.

About 750,000 workers are furloughed, and another 700,000 are working unpaid in essential roles. Critical agencies like the NIH, CDC, and WIC have scaled back operations, while courts are running out of funds. Markets are feeling the pinch as key data releases are delayed, adding uncertainty to already fragile sentiment.

Economists estimate each week of closure shaves 0.02 percentage points off GDP, with risks compounding if the stalemate drags on.

Political dynamics remain frozen: President Donald Trump and House Speaker Mike Johnson refuse to negotiate on healthcare or foreign spending, while Senate Democrats push to preserve ACA subsidies. A growing group of moderates from both sides is now urging compromise to reopen the government.

This week’s 11th Senate vote on a short-term funding bill will be pivotal—but expectations for a breakthrough are low. With another missed federal payday looming Oct 24, pressure on Capitol Hill is set to intensify.

The bankruptcy of First Brands Group — an auto-parts supplier — has triggered alarm bells. Its liabilities are reported more than $11 billion, with investigations into alleged accounting irregularities and “vanishing” funds.

Moreover, Tricolor Holdings — a sub-prime auto lender — also collapsed, raising broader questions about credit quality in the auto & consumer-finance sectors.

Leading banking executives, including  Dimon of JPMorgan Chase, have publicly warned that “when you see one cockroach, there are probably more,” signalling heightened concern about hidden exposures in non-bank or private-credit channels.

These developments underscore why the sub-prime story has leapt back into the spotlight: It’s not just about distressed borrowers anymore — it’s about how that stress interfaces with credit markets, shadow banking, and downstream exposures.

While the consumer credit weakness is real and should not be ignored, the structural risk to the financial system appears contained for now.

There has been much handwringing lately about the increasing credit problems among sub-prime borrowers and what the fallout might mean for the broader economy. And make no mistake: Sub-prime borrowers are indeed under serious strain. The delinquency rate on loans to borrowers with a Vantage score below 660 jumped to 8.3% in September — the highest September reading since 2010, in the wake of the Global Financial Crisis. That’s just more evidence of how hard-pressed lower- and middle-income Americans have become.

However, the notion that losses on sub-prime loans will deal a brutal blow to banks or the financial system appears overdone (see chart below).

Outstanding sub-prime loans currently total about $2.63 trillion, or roughly 15.3% of all household debt. By contrast, at the 2007 peak they were over $3.38 trillion, or approximately 28.2% of debt. Sub-prime first mortgages are a shadow of their former size per data from Moody’s analytics.

Even though sub-prime auto loans have grown — with over $400 billion outstanding — that’s still relatively modest in the context of the system. Not enough, in my view to bring down the economy or the financial sector. That said, the First Brands/Tricolor saga underscores that we are further into the cycle, underwriting standards are thinning, and subtle cracks may presage larger issues. In short: Watch with respect and discipline.

Source: Moody’s analytics, Equifax

I don’t often talk about crypto in these pages, so let me spend some time on it, as the digital asset world is growing and becoming more popular and acceptable than ever as mainstream institutions move in with large investment and plans for the sector. Even BlackRock’s Larry Fink, once a sceptic, now speaks of crypto with the conviction of a convert. His shift is telling. It’s a sign that the centre of gravity in finance is moving — quietly, steadily — toward the digital frontier.

Last week, I spoke at the Digital Asset Summit (DAS) in London organised by Blockworks. I shared what I called the allocator’s perspective on digital assets. My message was simple: The timeless principles of investing still apply. You understand risk. You weigh reward. You value optionality. You manage the trade with discipline.

But I’ll tell you something more personal. It took me a long time to get here. Years ago, my friend Kelly told me, “Buy Bitcoin.” It was four hundred dollars. I laughed. I thanked her. And I didn’t buy it.

I couldn’t make it fit inside my equity mindset — the one that wants to see cash flow, dividends, tangible proof. Bitcoin had none of that. It felt abstract, speculative, unserious. Another tulip craze, I thought. Another dot-com waiting to burst.

But then time passed. And I watched.

I saw that every great innovation begins as a punchline. The railroad. The telephone. The Internet. They all started in mania, ended in transformation.

So, I stopped asking, “Is this a bubble?” and started asking, “What is this trying to tell us?”

And what it told me was that trust — that fragile, essential thing that underpins all markets — was being rebuilt from the ground up. That money itself was being re-imagined, not by decree, but by design. So yes, I found my way to crypto the old-fashioned way — I ignored it for years, mocked it once or twice, then surrendered.

It’s still a risky asset, of course. But it’s one with immense optionality. And optionality is something to respect, not to leverage. Some learned that lesson again last weekend, when the market turned and liquidity vanished. An asset that can change the world doesn’t need leverage; it needs patience.

There will always be sceptics. There were with NVIDIA, too — remember that? The analysts who called it a bubble and taped a Cisco chart next to it? Sceptics are good for markets. They keep our confidence honest. I’d be worried if everyone were bullish.

The builders I meet in the crypto world today aren’t chasing memes or momentum. They’re tokenizing real-world assets. They’re fixing the plumbing of finance — settlement rails, infrastructure, security. It feels less like a casino and more like the early Internet again. Less noise, more engineering. Less flash, more foundation.

Digital assets remain one of the few corners of the market where you can find real optionality — asymmetric upside, uncorrelated innovation, and a front-row seat to the next market structure.

But one truth will never change. The old rules still apply. Discipline. Research. Sizing. Risk management. Understanding cycles. Anyone can look smart in a bull market — it’s staying solvent through the bear that defines you.

As Warren Buffett likes to say, “Only when the tide goes out do you discover who’s been swimming naked.” And in crypto, the tide goes out often.

Digital Asset Summit 2025, London UK (October 2025)

Source: DAS 2025, Blockworks

This moment feels like the early 2000s — when people said the Internet was finished, and quietly, Amazon and Google were being built. That’s where we are now: The boring but brilliant phase.

Every great innovation begins as a bubble — the railroads, the radio, the Internet, even AI. The bubble isn’t the end of the story; it’s the beginning of adoption.

Crypto is no different. It may still look strange, volatile, half-formed. But so did every idea that changed the world.

Moving on to one other sector that caught my attention – Biotech.

Biotech finally wakes up and IBB breaks out (chart below)

The Biotech ETF (IBB) has staged a notable recovery, advancing roughly 36% since the April 8 “tariff turmoil” low in the S&P 500. That puts the sector broadly in line with the broader market’s rebound. More importantly, last week’s move saw IBB break decisively above its late-2024 highs near $150, clearing a key technical resistance level and signalling renewed momentum.

However, the longer-term picture tells a different story.

Over the past five years, S&P 500 index (SPY) has appreciated nearly +90%, while IBB has gained only +7%. The sector’s last significant rally came during the pandemic, driven by vaccine and mRNA innovation, but since then, investor focus has shifted toward GLP-1 therapies and the technology sector’s AI-driven boom.

Biotech ETF (IBB): Last twenty-three years

Source: Bloomberg

Historically, Biotech’s last major multi-year advance occurred in the early 2010s, following the financial crisis and the passage of the Affordable Care Act (ACA), when capital flowed aggressively into healthcare innovation. The past decade, however, has been marked by relative underperformance and multiple false starts.

With IBB now breaking out in the short term and the integration of AI in drug discovery, clinical design, and data modelling accelerating, the conditions could be forming for a structural re-rating of the sector. While it remains too early to call a sustained cycle, Biotech’s combination of depressed relative valuations and emerging productivity gains from AI warrants closer attention from long-term investors.

Finally, the dot-com comparisons are inevitable — they always surface when tech leads the market. That’s why it’s worth grounding the conversation in data.

On forward earnings multiples today: NVIDIA trades around 26x, Costco about 47x, and Walmart near 40x. For context, in 1998, Cisco was trading at roughly 60x earnings — and by the peak of the bubble, that multiple had soared to 210x.

By that measure, we are nowhere near bubble territory. Still, after the extraordinary rally since the April lows, a correction — for reasons related or unrelated to fundamentals — wouldn’t be surprising. The key is to stay focused on quality: companies with proven earnings power or clear, structural relevance to the future economy.

And here’s one overlooked data point: despite endless talk of “overbought” conditions, there are currently twice as many oversold stocks (43%) in the S&P 500 as overbought ones (21%).

Source: Bespoke Invest

As always, disciplined investing through trusted structures that manage downside risk, remains the most reliable way to compound returns over time.

For specific stock recommendations and insights related to structured products, please do not hesitate to reach out to me or to your dedicated relationship manager.

 
Best wishes,

Manish Singh, CFA