Key takeaways

  • Since the start of the year, some of the key convictions that we have highlighted in our outlook have been playing out and some trends have accelerated. We are witnessing a regime shift characterised by heightened policy uncertainty and a distinct break in the international order — key themes highlighted at the Davos World Economic Forum and confirmed at the Munich Security Conference. Tariffs remain a key tool for the redesign of the new order. Here, the recent Supreme Court ruling against Trump’s emergency tariffs introduced an additional layer of uncertainty to the policy landscape.

  • All these developments confirm that the overall geoeconomic environment is in transition. President Lagarde’s mention in her speech of the ECB’s new repo facility for central banks outside the euro area signifies how policymakers are thinking about the rising importance of geoeconomics.

  • We are clearly entering a more complex market equilibrium, where policy — including trade policy — geopolitics, and capital allocation are as critical as the economic cycle itself. With growth proving more resilient than initially expected and corporate profitability remaining robust, markets have remained well sustained. However, significant rotations are underway across countries, sectors, and individual stocks as the environment adjusts to the ongoing regime shift.

  • A diversified and flexible approach will likely be the name of the game for investors to deal with these shifts and rotations.

Read more

immagine con giostre che girano illuminate

Read the full article on the Amundi Research center