Skip to main content
Subject:

Global Financial Markets

Market rally driven by optimism about AI and the Middle East

Friday, 08 May 2026, written by Edward Markus

The markets are discounting the expectation that AI will continue to drive economic growth and profits, and that the Strait of Hormuz will reopen soon, causing energy prices to fall and enabling central banks to limit the number of rate hikes. As a result, US equities have entered a blow-off phase. It is difficult to predict how long this phase will last, but for a number of reasons there is a very high chance that the markets are now becoming over-enthusiastic.

This report is published: Bi-weekly

Get access to this report

Request Report

Previous reports

Is the stock market too optimistic?

Thursday, 23 April 2026

Stock prices are already back at record highs and oil futures are trading well below spot prices. We do not share the optimism this reflects. In this report, we explain why — and why, as a result, EUR/USD could well see some surprising moves.

Request Report

A different kind of crisis than in the past

Thursday, 09 April 2026

For now, the economic damage caused by the war in Iran appears to be manageable as long as oil prices remain below $120 per barrel. Above that level, the consequences could quickly become more severe. But will the ceasefire lead to a lasting agreement? And what other factors are currently driving the direction of currencies, interest rates, and shares?

Request Report

Is “buy the dips” still the right strategy?

Thursday, 26 March 2026

“Buy the dip” has been the dominant strategy for years. But with geopolitical risk skyrocketing, booming energy prices, inflation risks returning and policy flexibility shrinking, that assumption may no longer hold. This report explains why and what it means for equities, EUR/USD and interest rates, among others.

Request Report

Eddy's Weekly Market Insight

Friday, 08 May 2026

Eddy's Weekly Market Insight

The Oil Price, AI, and a Strong Economy: When the Strait of Hormuz was closed, oil prices surged sharply. This immediately pushed up inflation expectations, leading to speculation about potential interest rate hikes by central banks. The next dominoes to fall were rising long-term interest rates and declining equity markets. The US dollar also strengthened, at least against the euro. For some time now, however, this reaction pattern has changed. While falling oil prices are still viewed positively by equity markets, rising energy prices no longer appear to have much impact on stock indices, which continue to move higher regardless. How come?
Continue reading
— Edward Markus, Founder & Chief Economist