07/10/2026
The Fed has delivered one hike, dot plots point to another before year end, and Q2 blended earnings growth reached 52.0%, the strongest season since 2021. Read our 4Q 2026 Outlook, Threading The Needle, at Q4 2026 Investment Outlook | Fed, AI & Asset Allocation to know how our investment team is reading the data across themes, asset classes and risks.
Strong numbers are getting a muted response. Positive earnings surprises have earned an average price reaction of +0.6% against a five-year average of +1.0%, and markets have become sensitive to risk headlines, inflation prints, Fed speeches and capex guidance.
Inside the report:
-Ten of eleven sectors growing, with net margins at a record 17.0%
-Cloud and AI revenue growth set against rising capex and debt-funded spending
-Investor margin debt, corporate AI financing and a roughly US$3 trillion private credit market, all moving in the same direction
-NATO's 5% of GDP defence commitment and AI-driven power demand
-Market breadth, with 28% of S&P 500 names above their 50-day average
-What would change our mind, and the risks we are watching most closely
Download the report - https://okt.to/9S0PfJ