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Gavekal-IS
The End Of The Risk-Free Asset
Didier Darcet
23 Jul 2026
The foundation of modern finance—the assumption that long-dated US treasuries are the world's risk-free asset—is increasingly being called into question. Didier argues that the era of abundant savings and stable sovereign bonds is giving way to one of capital scarcity, forcing investors to rethink everything from valuation frameworks to portfolio construction. As central banks diversify into gold and bond markets become less reliable anchors, he explores what should replace the traditional risk-free rate and how investors can adapt.
Gavekal Research
Video: India's Foreign Currency Funding Trick
Udith Sikand
23 Jul 2026
The Indian rupee has remained under pressure despite a series of measures, including offering overseas Indians highly attractive deposits in exchange for locking funds into the currency. In this interview, Udith examines why those efforts have so far failed to reverse the rupee’s weakness and assesses the broader macroeconomic trade-offs. He also discusses the htreats to India’s macroeconomic outlook and what this means for investors expecting a turnaround in the rupee.
Gavekal Research
The Energy Risk Remains (Part II)
Louis-Vincent Gave
23 Jul 2026
The energy risk from the conflicts in the Middle East and Ukraine continue to escalate, and away from the limelight, listed pureplay oil refiners (outside of China and its price and export controls) have been having a monster year of their own, with recent gains starting to go parabolic. The obvious risk is that as crack spreads rise, so does the pressure on politicians to do something about the rising price of gasoline and diesel. So how can investors guard their portfolios against such risks?
Gavekal Research
The Energy Risk Remains (Part I)
Louis-Vincent Gave
22 Jul 2026
Energy stocks, as a GICS sector, have delivered the best total return performance of any US sector over the past five years. Yet, tech stocks now account for almost 40% of the S&P 500’s market capitalization, while energy stocks—with their 3% weight—are close to record lows. So why are energy stocks so unloved, especially in the midst of an oil shock?
Gavekal Dragonomics
How China Is Handling AI’s Risk To Jobs
Andrew Batson
The Resurgence Of The “New Three”
Wei He
Rebuilding The Household Balance Sheet
Xiaoxi Zhang
The Growth Bounceback, Delayed
Wei He, Dragonomics Team
Why Luxury Housing Is Booming
Xiaoxi Zhang
Gavekal Research
Are US Corporate Profit Margins Too High?
Tan Kai Xian
The Big Shift I Missed In March 2023
Charles Gave
Who Is Copying Who? Part III
Louis-Vincent Gave
Neither US Exceptionalism Nor A European Boom
Cedric Gemehl, Tan Kai Xian
Are Markets Done With US Exceptionalism?
Louis-Vincent Gave
Gavekal Technologies
EVs’ Year Of Living Dangerously
AJ Cortese, Ernan Cui
China Regulates AI Companion Agents
Laila Khawaja, Huang Shichan
Five Questions On China Biotech
Tom Hancock, AJ Cortese, Huang Shichan
Memory Shortage Hits Smartphones
Laila Khawaja
The New Energy System Takes Shape
AJ Cortese, Arthur Kroeber
Gavekal-IS
The Great Confusion Over Economic Quadrants
Didier Darcet
The Bond Portfolio For A Swiss Investor
Didier Darcet
From Desacralization To Resacralization Of Power
Didier Darcet
A Baby Shower For Information As An Asset Class
Didier Darcet
The Thermodynamics Of The Nasdaq
Didier Darcet
Gavekal Research
Post-IPO Liquidity Stress Syndrome
Will Denyer
12 Jun 2026
SpaceX just raised a record US$75bn in its initial public offering on Thursday and may raise another US$11bn through the exercise of the greenshoe option. As investors make room in their portfolios for a deal that could ultimately total US$86bn, this is temporarily weighing on demand for other equities. Although the market should be able to digest an IPO of this size with little more than a temporary period of volatility, Will argues that some medium-term risks to US equities remain.
Checking The Boxes
Our short take on the latest news
Fact
Surprise
Takeaway
UK CPI rose 2.6% YoY in Jun, versus 2.8% in May
Below expected 2.7%; core CPI rose 2.6% YoY in Jun, the same pace as in May
Amid conflicting signals from wage pressures and energy prices, BoE to remain on hold
South Korea GDP rose 3.7% YoY in 2Q26, versus 3.8% in 1Q
Above expected 3.5%
Growth outlook underpinned by AI-related export boom; expect more BoK tightening
Indonesia left benchmark rate unchanged at 5.75%
Below expected 25bp hike
Amid renewed oil price spike and IDR weakness, expect BI to maintain tightening bias
South Africa CPI rose 5% YoY in Jun, versus 4.5% in May
Above expected 4.7%; core CPI rose 4.1% YoY in Jun, versus 3.8% in May
Upside surprise in inflation likely to reinforce SARB's hawkishness
Test Your Knowledge
How many college graduates do US employers say they will hire this year versus last year?
- -10.4% less
- -4.8% less
- 1.3% more
- 5.6% more
Chart of the Week
China’s households have made significant progress in rebuilding their balance sheets after the property bust destroyed much wealth. The combination of high savings and rising stock markets meant household wealth grew faster in 2025. The household balance sheet is likely to continue to get stronger in 2026, albeit in a way that increases inequality.
Open Chart
Gavekal Research
Essential Reading: A Book For Every Week Of The Year
Gavekal is often asked for a recommended reading list. So, here it is: a book a week that everyone interested in the world of macro investing—whether hoary veteran or eager apprentice—can benefit from reading.
Gavekal Research
Webinar: Regime Change Can Cause Market Madness
Anatole Kaletsky, Tom Holland
3 Jul 2026
Markets continue to behave as if the world has not fundamentally changed, even as inflation, interest rates, geopolitics and global capital flows enter a new regime. Anatole argues that investors are systematically mispricing four major shifts: the long-term outlook for inflation and bond yields, the global growth cycle, the rotation from AI-led growth to cyclical value and the end of US exceptionalism.
The Iran War And Fallout
The Energy Risk Remains (Part II)
The energy risk from the conflicts in the Middle East and Ukraine continue to escalate, and away from the limelight, listed pureplay oil refiners (outside of China and its price and export controls) have been having a monster year of their own, with recent gains starting to go parabolic. The obvious risk is that as crack spreads rise, so does the pressure on politicians to do something about the rising price of gasoline and diesel. So how can investors guard their portfolios against such risks?
The Energy Risk Remains (Part I)
Energy stocks, as a GICS sector, have delivered the best total return performance of any US sector over the past five years. Yet, tech stocks now account for almost 40% of the S&P 500’s market capitalization, while energy stocks—with their 3% weight—are close to record lows. So why are energy stocks so unloved, especially in the midst of an oil shock?
Geoeconomic Monitor: Latin America Turns Right
With tensions cooling in the Middle East, global attention is shifting elsewhere. In Latin America’s rambunctious political landscape, electorates continue to vote in right-wing leaders. But the wave may yet break before it reaches Brazil, where Luiz Inacio Lula da Silva is favorite to win his fourth term in October’s election, says Tom Miller. Back in the Strait of Hormuz, Tom Holland explains why Iran’s emerging protection racket sets a dangerous precedent for global trade.
Energy Markets Are Too Complacent
On Thursday morning in Asia, front month Brent crude futures were trading at US$72.48/bbl. The price is significant, because on February 27, just hours before the US and Israel began bombing Iran, Brent closed at US$72.48. In other words, with a memorandum of understanding on peace in place and talks scheduled on a longer-term deal, the price of oil has dropped back to where it was on the eve of the conflict. So, is the 2026 energy crisis really over—with relatively little economic harm done?
US economy & markets
Are US Corporate Profit Margins Too High?
US corporate profit margins remain remarkably resilient despite rising labor costs, deglobalization and tighter immigration policies. Kai Xian argues that slower labor force growth is encouraging companies to prioritize margins over expansion, while AI, government spending and financial engineering provide additional support. As a result, the widely expected mean reversion in profit margins may not materialize anytime soon.
Neither US Exceptionalism Nor A European Boom
Recent volatility in US technology stocks has reignited the debate over US exceptionalism. From an equity market perspective, the discussion is often framed as a binary choice. Cedric and Kai Xian argue that from a historical standpoint comparing US and European stocks that the debate is much more nuanced and centers around how much value investors put on earnings and political risk.
The Meaning Of Higher Real Yields
US real yields are rising. Long-term nominal yields are trending higher, too. But nominal yields on 20-year and 30-year treasuries are still within their ranges of the past three years. In contrast, the yields on long-term US treasury inflation-protected securities have broken above their post- 2008-crisis highs. This means the real cost of capital in the US is rising. Why is this happening? And what are the implications of the increase?
Will The AI Boom Prove Inflationary Or Deflationary?
Is the AI boom ultimately inflationary or deflationary? While heavy capital spending and competition for scarce resources are currently adding to inflationary pressures, the longer-term productivity gains from AI could eventually reverse that dynamic. With Federal Reserve Chair Kevin Warsh now making AI’s impact on productivity, employment and inflation a central focus of monetary policy, understanding where we are in this transition has become increasingly important for investors, say Will and KX.
China chartbook
Gavekal Dragonomics
Rebuilding The Household Balance Sheet
Xiaoxi Zhang
17 Jul 2026
China’s households have made significant progress in rebuilding their balance sheets. In this chartbook, Xiaoxi examines those balance sheets and finds that the combination of high savings, further deleveraging and rising stock markets meant household net worth grew faster in 2025, and that pattern looks to be continuing in 2026. The household balance sheet will thus continue to get stronger—though the pattern of wealth is more unequal than in the past, and the number of households in financial distress is rising.
India chartbook
Gavekal Research
India Macro Update: Downside Risks Abound
Udith Sikand, Tom Miller
23 Sep 2025
India’s domestic economic recovery is at risk as Prime Minister Narendra Modi’s government faces a lose-lose choice: continue to import cheap oil from its long-time ally Russia or face punitive tariffs in its biggest export market. Last week’s US interest rate cut will give the central bank more room to cut rates, but the underperformance of Indian asset prices looks set to continue.
Latest video
Gavekal Research
Video: India's Foreign Currency Funding Trick
Udith Sikand
23 Jul 2026
The Indian rupee has remained under pressure despite a series of measures, including offering overseas Indians highly attractive deposits in exchange for locking funds into the currency. In this interview, Udith examines why those efforts have so far failed to reverse the rupee’s weakness and assesses the broader macroeconomic trade-offs. He also discusses the htreats to India’s macroeconomic outlook and what this means for investors expecting a turnaround in the rupee.
Strategy Chartbook
Gavekal Research
Quarterly Strategy Review: 2Q26
Louis-Vincent Gave
3 Jul 2026
The second quarter was dominated by an extraordinary surge in risk appetite as semiconductor stocks powered one of the largest increases in global equity market capitalization on record, yet beneath the exuberance, markets underwent significant macro shifts. Louis reviews the quarter's defining developments.
Emerging markets
Video: Are EMs Back?
It’s been a good quarter for the broad emerging markets complex. The MSCI EM index has returned almost 7% in US dollar terms, while US equities are down by some -3.5%. So should investors jump on the EM train? Udith points out that there is a wide divergence in the performance of individual emerging markets, and the threat of tariffs hangs heavy over EM corporate earnings. Investors need to be selective.
Video: Southeast Asia Under Trump 2.0
Global investors are rightly focused on the potential losers from the United States pursuing an aggressively protectionist trade policy agenda, but there may be winners as well. Tom went in search of such economies last week. Today he explains how such “swing states” are likely to perform in an intensified period of great power rivalry between the US and China.
China Turbocharges EM Investment
As the rich world pulls up the protectionist drawbridge, investors risk missing a bigger story
in emerging markets. Here, Chinese outbound investment is rebounding after the fallow Covid years, and is driving a new wave of industrialization that promises to lower the cost of the green-energy transition.
Why This Time Has Been Different
During past episodes of risk-off volatility, the correlation between emerging market risk assets has shot up. But early August’s bout of market volatility saw a bifurcation in EMs, and no broader macroeconomic spillover effects—which speaks well of the growing maturity of emerging markets as an asset class.
Europe's economy
Neither US Exceptionalism Nor A European Boom
Recent volatility in US technology stocks has reignited the debate over US exceptionalism. From an equity market perspective, the discussion is often framed as a binary choice. Cedric and Kai Xian argue that from a historical standpoint comparing US and European stocks that the debate is much more nuanced and centers around how much value investors put on earnings and political risk.
France And The Limits Of Eurozone Spread Compression
The 2027 electoral calendar for the eurozone is unusually heavy. France holds the first round of its presidential election on April 18, while Spain and Italy must hold general elections by August 22 and December 22, respectively. Together, these three countries account for 59% of the eurozone’s €13.9trn public debt stock. This raises a simple question: can eurozone sovereign spreads compress much further as political risk mounts next year?
Europe’s Rearmament Is Hardening
After a chaotic day in Ankara, Nato leaders appeared to reach a consensus, recommitting to spend 5% of GDP on defense. While attention centered on President Donald Trump’s threats to restart US bombing of Iran, the summit will likely be remembered for cementing Europe’s shift toward rearmament. The question now is whether that buildup happens quickly through purchases of US weapons systems or more gradually as Europe rebuilds its own military-industrial complex.
Stagflation Averted, Upswing In Place
The latest batch of data from the eurozone suggests that the inflationary shock from the US-Iran war is already fading. As it recedes, so does the risk of economic stagflation, leaving the eurozone free to rediscover the gentler, more benign, underlying reflationary trend that had been bedding down before the war’s start.
Currencies
Important Recent Developments
The Slump In Asian Currencies
A Concentrated Inflationary Boom Or A Bet On The Fed?
Demand And Supply Of Money
Dialing Back Expectations For Appreciation
Monetizing US Budget Deficits
Oil & commodities
The Energy Risk Remains (Part I)
Energy Markets Are Too Complacent
Video: Oil After Hormuz
The State Of World Oil Stocks
Geoeconomic Monitor: After Beijing
Copper, Oil And Gold
