Manthey of Citi and Shah of Principal see gains but warn on valuations

Watch on YouTube ↗  |  January 13, 2026 at 12:26  |  7:16  |  CNBC
Speakers
Beata Manthey — Head of European Equity Strategy, Citi
Seema Shah — Chief Global Strategist, Principal Asset Management

Summary

Beata Manthey of Citi and Seema Shah of Principal discuss a broadly constructive but volatile global equity outlook. They see earnings and economic broadening, opportunities in Asia, and continued AI/tech relevance, but warn that high valuations and political risks could drive volatility. Asia, Korea/Taiwan, and China receive specific attention, while gold and defensive staples are framed as areas supported by uncertainty.

  • Beata Manthey expects record earnings and broadening global earnings growth, but says high valuations leave stocks vulnerable to news flow.
  • Seema Shah likes Asia for cheaper tech valuations, diversification from US concentration, better economic prospects, and a constructive China view.
  • Beata Manthey is overweight Korea and Taiwan as the cheapest AI play, while saying China was recently downgraded.
  • Beata Manthey sees rest-of-world equities outperforming the S&P 500 and AI broadening beyond hyperscalers into adopters.
  • Both speakers retain a positive tech/AI stance, though Seema Shah says tech euphoria has faded and expects broadening into less-loved sectors.
  • Gold and staples are highlighted as defensive areas amid volatility, with Seema Shah tying gold strength to political turmoil.
  • Key risks cited are high valuations, political volatility, and dependence on earnings delivery.
Ideas
Beata Manthey Head of European Equity Strategy, Citi 0:33
Global earnings broaden; positives outweigh negatives.
She is encouraged by record earnings and expects earnings broadening around the world, with all sectors and regions delivering positive growth this year, unlike last year's tariff-driven contractions. High valuations mean stock prices are vulnerable to news flow and could see volatility, but the positives are expected to outweigh the negatives, so she remains positively tilted on global equities.
VT HIGH
Seema Shah Chief Global Strategist, Principal Asset Management 2:00
Asia attractive; tech exposure, diversification.
She likes Asia because it offers cheaper valuations with technology exposure, provides diversification away from US concentration risk, and has better economic prospects supported by central bank easing and a constructive China outlook. She expects this to help Asian stocks and particularly technology.
AAXJ Asian technology HIGH
Seema Shah Chief Global Strategist, Principal Asset Management 2:44
China optimism supports Asian equities.
She is quite positive on China, seeing optimism and a good news story emerging from the region, although she does not expect a very strong year; this should help Asian equities and technology.
FXI MED
Beata Manthey Head of European Equity Strategy, Citi 4:22
Volatility favors gold and staples defensives.
Amid a volatile but not exuberant stock market, she points to gold and staples as defensive areas that are being supported by investor concern; staples had also been a major underperformer last year, so prior positioning matters.
GLD XLP MED
Beata Manthey Head of European Equity Strategy, Citi 4:49
AI theme broadens beyond hyperscalers.
Tech and AI remain key global equity themes, but the AI trade is broadening beyond hyperscalers into adopters, which should allow regions outside the US to participate more.
XLK AI-SECTOR HIGH
Beata Manthey Head of European Equity Strategy, Citi 5:01
Rest of world outperforms S&P.
She highlights record outperformance of the rest of the world over the S&P 500, the biggest since 2009, and argues the broadening of AI beyond hyperscalers means non-US markets can continue to shine.
VXUS HIGH
Beata Manthey Head of European Equity Strategy, Citi 5:21
Overweight Korea and Taiwan AI plays.
The cheapest AI play is Asia, so Citi is overweight Korea and Taiwan to gain exposure to the broadening AI theme at more attractive valuations than US AI assets.
EWY EWT HIGH
Beata Manthey Head of European Equity Strategy, Citi 5:24
China downgraded, less favorable stance.
Citi recently downgraded China in December, signaling a less favorable stance on Chinese equities within its Asia allocation.
FXI LOW
Seema Shah Chief Global Strategist, Principal Asset Management 6:01
Global equities supported by economic broadening.
The equity market continues to do well because investors are focused on positive economic news globally, not just in the US, and she expects a broadening out to sectors that have been less loved than technology.
VT MED
Seema Shah Chief Global Strategist, Principal Asset Management 6:13
Gold responds to political turmoil.
Gold is being supported by political turmoil in the first two weeks of 2026, after investors expected a less politically volatile year; the market turbulence is what gold is responding to.
GLD MED
Seema Shah Chief Global Strategist, Principal Asset Management 6:49
Tech remains good despite faded euphoria.
Tech euphoria faded in late 2025, but technology remains a good story; with a strong US economic backdrop, she expects broadening into other less-loved sectors and continues to favor tech.
XLK MED
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This CNBC video, published January 13, 2026, features Beata Manthey, Seema Shah discussing VT, AAXJ, Asian technology, FXI, GLD, XLP, XLK, AI-SECTOR, VXUS, EWY, EWT. 11 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Beata Manthey, Seema Shah  · Tickers: VT, AAXJ, Asian technology, FXI, GLD, XLP, XLK, AI-SECTOR, VXUS, EWY, EWT