Equities

The London Sino-US trade talks offered hope of de-escalation, but Chinese equities remain under pressure from deflationary headwinds and lack a clear macro catalyst to trend higher.

Robotics is on the cusp of a new, powerful uptrend, powered by reshoring and technological breakthroughs that make robots more capable and affordable.

This week our three screeners explore equity trades in gold mining stocks, European banks, and US stocks ex-Tech should a recession not be imminent. 

I am a structural disbeliever in the US superstar stocks because these winners of the previous technology, Web 2.0, are unlikely all to be the winners of the latest technology, AI. But I would suspend my disbelief if the Magnificent-7 index reaches a new high and the bursting AI-bubble configuration is broken. Plus, a new recommendation is to overweight Global Healthcare (IXJ).

The US High Quality (USHQ) portfolio underperformed its benchmark through May, returning 5.1%, whilst its SPY benchmark returned 6.1%. On a trailing three-month basis, performance is also slightly weaker vs. benchmark, with USHQ underperforming by approx. 130bps. Notably, volatility and drawdown remain lower than the SPY, aiding risk-adjusted performance.

In the front section of the chart pack, we review May’s performance and adjust our portfolio positioning.