Laura Cooper

Old economy sectors like industrials, materials, and energy infrastructure are AI-adjacent and not directly exposed to AI disruption, making them attractive as they benefit from AI infrastructure spending; this creates dispersion opportunities in credit markets.

Old economy sectors like industrials, materials, and energy infrastructure are AI-adjacent and not directly exposed to AI disruption, making them attractive as they benefit from AI infrastructure spending; this creates dispersion opportunities in credit markets.

There is AI exposure in European metals and mining, and the copper dynamic looks bullish. The team is quite bullish on copper as part of a broader European opportunity set.

Tech earnings remain exceptionally robust with margin expansion, and while valuations have come off the June peak they are still above average. The earnings backdrop—not multiple expansion—will drive the market higher, and there are no cracks yet in return on AI investments.

AI and technology broadly are a huge opportunity for European countries. Europe is optimally placed in business services, financial services, healthcare and other sectors, and the AI catalyst is driving M&A well beyond pure tech.

German government bond issuance next year will be a key headwind driving German yields higher from current levels.

The Mag Seven posted above 40% Q2 earnings growth even after stripping out idiosyncratic factors, so investors must maintain exposure in that mega-cap AI space.

European semiconductor names give investors exposure to the US AI trade.

Nine of 11 US sectors posted double-digit Q2 earnings growth, so she wants broad US equity exposure beyond just AI.

Old economy sectors such as industrials, materials, and energy should be more resilient in the AI cycle and offer attractive exposure.

Old economy sectors like industrials, materials, and energy infrastructure are AI-adjacent and not directly exposed to AI disruption, making them attractive as they benefit from AI infrastructure spending; this creates dispersion opportunities in credit markets.

The oil futures curve is already at $85-90 through the end of the year. Even if a deal reopens the Strait of Hormuz within 30 days, persistent supply chain pressures and a limited time frame mean crude oil prices are unlikely to come off materially, keeping them elevated.

US tech companies have pricing power and serve as an inflationary hedge, making them defensive in the near term while European equities are more exposed to the energy shock from the Iran war. The resilience of US tech earnings supports this view.

"We are seeing that disruption in oil flows be significant multiples of the disruption we saw back then... This is an environment where we are now unlikely in a higher for longer yield backdrop, because we do not see any near-term relief for yields to come down meaningfully." A sustained oil shock feeds directly into headline inflation. Central banks, bound by their mandates, cannot cut interest rates while inflation is accelerating, even if economic growth is slowing (stagflation). This forces the market to price out previously expected rate cuts, driving long-duration bond yields higher and prices lower. SHORT. Fixed income offers no protection in a supply-driven inflation shock; yields must rise to reflect the new inflation reality. The energy shock causes such a severe and immediate economic contraction that central banks are forced to abandon their inflation fight and cut rates to prevent a depression.