Equities

India is seeing net capital outflows for the first time in a generation. The central bank is selling foreign reserves to defend the rupee, which is draining banking system liquidity. The latter risks derailing the nascent credit revival. Indian stock prices remain vulnerable.

MacroQuant recommends a modest overweight position in equities, favors an above-benchmark duration stance in fixed-income portfolios, remains bearish on the US dollar, has downgraded oil to neutral, and is bullish on copper and gold.

Tech has starkly underperformed other equity sectors and the tech-heavy US market has underperformed non-US markets, but global stocks are up and have comfortably outperformed bonds. This pattern of performances is likely to continue through the rest of 2026. Plus, two new tactical trades are: long coffee; and long ETH.

For this screener report, we explore opportunities in laggards with earnings momentum, Japanese semiconductors and US rate-sensitive stocks.

The near-term outlook is less supportive for European banks and defense equities. We downgrade banks to neutral and continue to expect defense stocks to trade in a “sell the rumor, buy the news” pattern.

If humanoid robots were to become substitutable for workers, the AI age could lead to rapid growth in the size of the effective global labor force. The result could be a larger version of the “China shock,” which followed China’s entry into the global economy.

The Warsh Fed will run the US economy hot. This is bad for T-bonds and the dollar, but good for stocks. Plus, a new tactical trade is overweight Consumer Discretionary (RXI) versus Industrials (EXI).

For this screener report, we explore opportunities in a CapEx premium divergence trade, a valuation convergence trade, and European Defense Stocks.

It appears that households have been able to spend more than they’ve earned since May by dipping into their swollen brokerage accounts. Bulked-up equity holdings could herald a future where consumption is more sensitive to stock market ups and downs. That’s great in bull markets but could be an unexpected drag on activity when the next bear arrives.

2026 should see another year of gains for the S&P 500, but, as the bull market matures and growth slows, returns will be capped by revenue growth rather than being boosted by expanding margins and multiples. We think Tech can outperform, but leadership will broaden and performance gaps will narrow.