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Overstretched foreign inflows into Brazilian markets will reverse, while soaring oil prices will not benefit Brazil in the near term. Avoid the country’s risk assets and the BRL, and stay underweight Brazilian equities and fixed income relative to EM. We also recommend paying 10-year Brazilian swap rates.

We continue to expect the S&P 500 to gain ground in 2026, driven by revenue growth, with limited scope for margin or multiple expansion. With cyclical upside tilted toward the investment side of the economy, we favor sectors with high-quality, revenue-driven earnings growth, leverage capex, and valuations that leave room for catch-up.

One month into the Iranian conflict, we take stock of how markets have moved so far and how some of the big open questions might influence them going forward. A long opportunity may be developing at the long end of the Treasury curve.

The current macro environment is a toxic brew of many of the same vulnerabilities that haunted the global economy in the lead-up to past recessions: Rising oil prices, an unsustainable tech capex boom, elevated equity valuations, excessively high homes prices, and brewing stresses in private credit and other parts of the financial system. While global equities look increasingly oversold in the very near term, they will still finish the year below current levels.

Indonesian rupiah will continue to plunge, and its local-currency bond yields will rise materially. Investors should short domestic bonds, currency unhedged.

Bank Credit Analyst

In Section II, Jonathan examines the humanoid robot segment of the emerging physical AI landscape, concluding that humanoid robots are a potential but not yet imminent investment theme.

Bank Credit Analyst

In Section I, Doug argues that investors should maintain mildly defensive positioning while awaiting the restoration of normalized shipping flows through the Strait of Hormuz. In Section II, Jonathan examines the humanoid robot segment of the emerging physical AI landscape, concluding that humanoid robots are a potential but not yet imminent investment theme.

The Iran war may not deescalate in the near term, and if it does, it will likely reescalate later this year, suggesting investors should take a cyclically defensive outlook.

Investment risk in Private Markets differs from that in Public Markets. It unfolds over time, with today’s issues coming from yesterday’s investments. We explain why, and more importantly, why the next dollar now faces lower risk across both macro and fundamental drivers. Just do not expect a discussion about standard deviations.

In today’s Strategy Insight, we show why both a quick resolution and a prolonged crisis ultimately point to lower yields.