The markets are looking past the oil crisis, but we believe investors are placing too much faith in a swift return to normality in the Middle East. As long as profit forecasts continue to rise, the bull market may continue, but risks are piling up: physical oil shortages, private debt stress, AI concentration and high valuations, among others. Are investors in for a nasty surprise?
A new macroeconomic framework for asset allocation
Monday, 30 March 2026
The war in the Middle East is driving a fundamental shift from efficiency toward certainty. The result: higher interest rates, slower earnings growth, elevated geopolitical uncertainty, and a changed central bank response to economic downturns. The consequences for financial markets and tactical asset allocation are substantial.
The bull market continues to be supported by strong growth and accommodative policy, but cracks are appearing beneath the surface. Is it time to reposition the tactical asset allocation?
Investors continue to shrug off escalating geopolitical risks and the alarming rise in government debt burdens. Market sentiment remains exuberant, with valuations stretched to extremes, especially in the US. In our latest asset allocation update, we ask: Is this the moment to pivot to a deliberate contrarian stance?
