Despite rising geopolitical tensions, the underlying macroeconomic backdrop remains supportive of risky assets, with US technology, high-yield bonds, and gold continuing to anchor our allocations.
Key investment themes
- Gold: Central banks’ sustained purchases of gold may push prices higher.
- US and Asian technology: Despite increased noise about an AI bubble, valuations are justified by the strong growth of cloud computing and potential productivity gains in the coming years.
- Critical materials: Metals are the key building blocks of today’s economies and are critical to that of a future shaped by AI and electrification.
- Power demand: Utilities continue to provide a resilient foundation for earnings, benefiting from high earnings visibility and incremental upgrades that help absorb market volatility.
A cyclical recovery takes shape
Just one month into 2026, global growth is firming up under the new economic world order. Re-synchronised growth is regaining momentum globally, driven by investments in artificial intelligence (AI) and infrastructure.
This trajectory is borne out by encouraging macroeconomic data: a rebound in industrial activity, an appetite for investment, and strong consumer demand. The US remains on a solid growth path, while in Europe growth is gathering pace, buoyed by Germany’s fiscal stimulus plan. At the same time, disinflation is taking hold, with interest rates easing back towards the 2–2.5% range, driven by lower energy prices and moderating services inflation.
Taken together, these indicators point towards a cyclical recovery, notably in the US. Yet investors seem reluctant to embrace this shift in narrative, in terms of allocation to risk assets, after a year dominated by a technology-led bull market.
This backdrop argues in favour of risk assets, but a broader allocation. However, this year has opened on an uncertain note: early-year swings in commodity prices and AI investment amid questions arising over the sustainability of AI’s earnings add a further layer of volatility.
Read our House View for more insights.
The financial instruments and investment strategies portrayed in this document are for informative purposes only. They may differ from those effectively held in an investor’ portfolio. Depending on the jurisdiction and investment profile, one or some of these instruments and strategies – including, where applicable, options – may not be permitted, available or suitable. The opinions expressed herein are correct as at 9 February 2026 and are subject to change without notice. Any forecast, projection or target, where provided, is indicative only and is not guaranteed in any way.
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