Joe Zidle

Japan has finally transitioned from deflation to mild inflation, which is a positive regime shift. Inflation encourages consumption as people spend before prices rise further. Japan's policy rate is only 1% and there is still significant upside potential for the market.

Korea plays a crucial role in the AI supply chain and is benefiting from the global AI capital expenditure cycle. The companies driving this capex are not interest-rate sensitive and have strong cash flows, ensuring sustained investment. Korea continues to have a good flow.

The massive AI data center buildout in the US is a multi-year, historic capex cycle requiring enormous amounts of power, construction, and commodities. Even though energy prices had pulled back, the underlying earnings power and industry fundamentals remain very compelling. Materials and business cyclical stocks are also still attractive as they are undervalued and under-owned, with near-term earnings pull-forward.