Equity prices of AI-related companies are increasingly showing signs of a late-stage bubble, but that does not necessarily mean the bull market is already over. Falling energy prices and downward pressure on long-term yields could provide broader support for growth and risk assets. At the same time, risks are mounting beneath the surface. In this report, we analyse the key tipping points and their implications for our tactical allocation across equities, bonds, commodities, property and gold.
Significant profit growth, the limited impact of high oil prices on growth so far, and enthusiasm for AI are keeping an ageing bull market afloat. But how much longer can it last, what are the possible reasons for a trend reversal, and what does this mean for tactical asset allocation decisions?
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.
