CoreMacro

Europe’s resilience to global liquidity deterioration isn’t a fluke—it signals a structural shift. Our latest report explains why the decline in precautionary money demand marks the end of Europe’s liquidity trap and what it means for investors.

The MacroQuant model is no longer bullish on stocks but is not yet prepared to turn underweight. Subjectively, the Global Investment Strategy team is more bearish on equities than the model.

The US (and the UK) is staring down the barrel of a ‘mini-stagflation’ until a deflationary shock arrives to neutralise it. We describe a likely source for the deflationary shock and list three investment conclusions that are valid irrespective of how long it takes for the deflationary shock to arrive. Plus: RCI.B is deeply oversold and ripe for a rebound.

Trump’s ceasefire talks are positive for Germany – and so was the German election result. But Trump’s tariffs will hit Germany soon. Investors should use near-term volatility to increase exposure to Germany.

US growth has slowed in recent weeks. This can be seen in the weaker data on retail sales, consumer confidence, services PMIs, and a swath of housing releases (notably starts, existing home sales, homebuilder confidence, and stock prices). It can also be seen in the decline in GDP tracking estimates. The Atlanta Fed's GDPNow model projects growth of 2.3% in Q1, down from a peak of 3.9% on February 3. The Citi US Economic Surprise Index has also dipped into negative territory.

This week’s report discusses the questions we were asked most frequently when we met with investors in the Midwest two weeks ago. We reiterate our pessimistic fundamental take and our neutral asset allocation recommendations.

Eurozone banks have quietly outpaced the Magnificent 7—can they keep winning? With strong balance sheets, rising profitability, and structural tailwinds, European lenders still offer value despite short-term risks. Meanwhile, German equities continue to defy expectations, but is a near-term pullback on the horizon?

Special Report

The Trump administration posits that the world owes the US for the provision of its security. In this report, we perform a quantitative analysis to come up with a naïve estimate of the cost of that peace. More importantly (and more seriously), our qualitative assessment argues that save for a number of frontline countries that rely on the US defense umbrella, the vast majority of the world faces manageable security threats due to the complex multipolar global environment and a growing number of alternatives to the US security blanket.

DeepSeek's AI breakthrough will likely enhance China’s productivity gains. But does it justify a re-valuation in Chinese tech stocks? Sustaining the Chinese tech rally will require corporate profits to overcome the pressures of China’s deflationary cycle. Meanwhile, DeepSeek’s innovations may fuel greater competition, intensifying price wars and putting further strain on Chinese tech companies’ profit margins.

Special Report

We are at a pivotal moment for Europe, supported by structural reforms and macro catalysts. While expanding credit markets and lower rates favor Private Equity over Private Credit, opportunities vary by segment. Large+ Buyouts are attractive as markets have priced in structural challenges. We downgrade Europe Private Credit, remain neutral on Europe Private Equity broadly but overweight Europe vs. North America in PE portfolios.