Grace Peters

Central Banks continue to be heavy buyers of Gold. Despite the recent pullback (volatility), the structural bid from Central Banks diversifying reserves remains. It acts as a hedge against the "AI Bubble" risk and geopolitical instability. LONG Gold (buy the dip). High real rates persist, making non-yielding assets less attractive.

Tech valuations are stretched, but earnings growth is broadening (13% growth). "Old Economy" sectors are the beneficiaries of the AI build-out (Industrials building data centers, power generation) and are seeing earnings inflections (Health Care). They offer operational leverage to AI without the valuation premium of the Mag-7. LONG Cyclicals and Defensives (Diversification away from pure Tech). Economic slowdown hits cyclicals hardest.

Tech valuations are stretched, but earnings growth is broadening (13% growth). "Old Economy" sectors are the beneficiaries of the AI build-out (Industrials building data centers, power generation) and are seeing earnings inflections (Health Care). They offer operational leverage to AI without the valuation premium of the Mag-7. LONG Cyclicals and Defensives (Diversification away from pure Tech). Economic slowdown hits cyclicals hardest.

Infrastructure is an attractive asset class for income with inflation protection, as it remains underwhelmed by the market and will benefit from structural CapEx trends.

Oil prices will remain elevated with a risk premium over the next 12 months due to ongoing Middle East tensions, regardless of a potential resolution.

Emerging markets are a favorite area because they are experiencing a structurally different cycle driven by commodities and minerals, and a strong tech cycle in Asia (particularly South Korea and Taiwan). Earnings growth in EM is expected to be robust, which will drive share prices over time.

Speaker maintains a "positive view on equities" and believes the AI-driven "productivity gains... would ultimately support corporate margins." She states AI is at an "inflection point" and will "spread through the whole market, many sectors of the market." The AI value chain is a primary driver of U.S. equity market resilience and earnings growth, transcending the tech sector alone. The thematic tailwind from AI adoption is seen as strong enough to outweigh near-term concerns over inflation and geopolitics for equity investors. A severe energy price shock (e.g., oil >$140) erodes corporate margins and offsets AI productivity gains.

The sector is expensive relative to its growth profile. In a cyclical upswing (Goldilocks scenario), investors want growth or beta. Staples offer neither—they are "bond proxies" that are currently overpriced and failing to grow earnings at a competitive rate. SHORT / UNDERWEIGHT Consumer Staples. A recession triggers a flight to safety, boosting staples.

Tech valuations are stretched, but earnings growth is broadening (13% growth). "Old Economy" sectors are the beneficiaries of the AI build-out (Industrials building data centers, power generation) and are seeing earnings inflections (Health Care). They offer operational leverage to AI without the valuation premium of the Mag-7. LONG Cyclicals and Defensives (Diversification away from pure Tech). Economic slowdown hits cyclicals hardest.