The Week in Markets: Strong Earnings, Cautious Markets
Q3 US corporate earnings continue to report strong, with S&P 500 profits on track for 12% year-on-year growth and widespread beats on sales and margins. However, despite robust fundamentals, stocks reacting to positive reports have underperformed historically, weighed down by already-bullish investor positioning. An inverted put-call skew in the “Magnificent 7” suggests elevated optimism, often followed by short-term pullbacks. Meanwhile, fears of AI-fuelled overinvestment in tech appear overstated: while capital expenditure is rising, it remains modest as a share of revenue, free cash flow, and GDP. Looking at China, policy direction after the Fourth Plenum supports continued advancement in AI, semiconductors, and robotics, while the recent Xi-Trump meeting offers temporary relief on trade tensions. Though near-term consolidation is possible, structural drivers keep China tech and equities attractive for diversified portfolios.
--------
8:24
--------
8:24
The challenge of reducing USD exposure without sacrificing yield
October was a busy month for those involved in FX transactions and the vagaries of the precious metals markets. With the US Federal Reserve having started to lower rates and continuing expectations of a weakening dollar, how are investors positioning themselves as they head towards year end? In this episode of the Beyond Markets Podcast, Bernadette Anderko sits down with Tim Gagie, Head of FX and Precious Metals Sales at Julius Baer Geneva to discuss the challenges involved in reducing dollar exposure, what alternatives look interesting and of course, the explosive performance of gold in 2025 and how volatility is providing investors with interesting opportunities.(00:11) - Introduction
(01:22) - Adjusting to further dollar weakness
(02:31) - Is anyone actually selling the dollar?
(03:27) - USD alternatives being investigated
(04:30) - Emerging market currencies
(05:56) - The situation in silver and gold
(07:38) - What’s the key takeaway?
(08:20) - Closing remarks
For a general overview of how currency markets work, refer to our previous episode from July 2022 with Tim, titled ‘Currency matters’: https://podcasts.apple.com/podcast/currency-matters/id1552236298?i=1000568939307Would you like to support this show? Please leave us a review and star rating on Apple Podcasts, Spotify or wherever you get your podcasts.
--------
9:50
--------
9:50
The Week in Markets: Q3 earnings outpacing analyst expectations so far
87% of the S&P 500 index companies that have reported their Q3 earnings thus far have beaten consensus forecasts - significantly higher than the 10-year average beat rate of 75%. Earnings growth is running at 9.2% year/year, vs. 7.9% that analysts had estimated prior to the start of the reporting season. The NASDAQ 100 index is also on track to post 7 consecutive months of gains. In each of the four times this had happened before, returns in the 12 months that followed were double-digit, averaging 17.5%. This episode is presented by Mark Matthews, Head of Research Asia at Julius Baer.
--------
14:35
--------
14:35
The Week in Markets: Encouraging signs in Hong Kong’s long-beleaguered property market
Recent bankruptcies of companies that accessed the private debt market are a reminder that manager selection is of the utmost importance. The real acid test for the private debt market will be the next recession, although there are no signs of one on the horizon. Still, the labour market is changing, and we look for a rate cut at the Fed’s next meeting on October 29, followed by another three by March. Alibaba claims to have invented a computing pooling solution that reduces the number of Nvidia GPUs needed to serve its AI models by 82%. An index of Hong Kong residential property infers prices are up 6% this month. This episode is presented by Mark Matthews, Head of Research Asia at Julius Baer.
--------
12:19
--------
12:19
Why AI is driving the current emerging markets equity rally
For the first time in five years, emerging market equities are outperforming their developed market peers. But what’s driving this rally? Interestingly enough, this boom is driven by a rather small number of stocks, mainly located in North Asia.In this episode of the Beyond Markets podcast, Nenad Dinic, Emerging Market Equity Strategist and Manuel Villegas, Next Generation Research Analyst, discuss with Ayako Lehmann why emerging market equities are having this strong run, to what extent developed markets are highly dependent on AI components coming from Asia and whether the usual commodities and macro factors that used to be the key drivers of EM equities have lost their importance or not and what this all means when it comes to diversifying a global portfolio.(00:11) - Introduction
(00:54) - What drove past emerging markets equity rallies?
(01:48) - What exactly has changed now?
(03:02) - Is Asia matching the U.S. AI boom?
(05:36) - Will Asia soon lead AI markets?
(08:16) - Where is the U.S. & China story going?
(11:07) - Will the shift in EM from commodities to tech remain?
(16:12) - Is portfolio diversification with EM still relevant?
(21:40) - Do we remain constructive on AI globally?
(24:40) - Closing remarks
Would you like to support this show? Please leave us a review and star rating on Apple Podcasts, Spotify or wherever you get your podcasts.
“Beyond Markets” by Julius Baer is a series featuring conversations with experts to share recent market developments, key insights, and strategic inputs from around the globe. In each episode, we cut through the noise to offer practical advice and macro research on today’s shifting economic and market landscape.
The information contained in this podcast is marketing material. Opinions expressed do not constitute independent financial/investment research, investment advice, or an offer to buy or sell securities by Julius Baer. Please refer to www.juliusbaer.com/legal/podcasts for important legal information prior to listening to this podcast.
South Africa