Most recent
Gavekal Research
Are Markets Done With US Exceptionalism?
Louis-Vincent Gave
17 Jul 2026
When Donald Trump was reelected, the market consensus was that a new era of deregulation was set to be unleashed across US financial markets. Economic growth would be stronger in a new era of unabashed US power. Clearly we had entered the golden age of US exceptionalism, and most investors are positioned that way. But that is not what US assets seem to be signaling, while recent events are also rapidly changing the investment environment.
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.
Gavekal Research
Where Will The Next Shortage Be?
Louis-Vincent Gave
16 Jul 2026
Markets are increasingly being driven by one question: what will the world not have enough of next? Louis argues that investors should focus on identifying the next scarcity asset before the consensus does. He says that the shift into an inflationary environment is making shortages a powerful driver of returns. From semiconductors and refined oil products to rare earths, copper and currencies, he suggests which shortages are already priced in, which are being overlooked and where the next opportunities may emerge.
Gavekal Research
The Meaning Of Higher Real Yields
Tan Kai Xian
16 Jul 2026
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?
Gavekal Dragonomics
The Growth Bounceback, Delayed
Wei He, Dragonomics Team
Why Luxury Housing Is Booming
Xiaoxi Zhang
Different Provinces, Same Industrial Policies
Tilly Zhang
In Search Of Fiscal Sustainability
Wei He
Transforming Trucking
Ernan Cui, Thomas Gatley
Gavekal Research
Video: Breakdown Or Buying Opportunity For US Bonds?
Will Denyer
Important Recent Developments
Louis-Vincent Gave
A Stupid World
Charles Gave
Japan’s ‘Invest More At Home’ Plan
Udith Sikand
Will The AI Boom Prove Inflationary Or Deflationary?
Will Denyer, Tan Kai Xian
Gavekal Technologies
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
CXMT Is Growing Fast, But Can’t Solve The DRAM Shortage
Laila Khawaja
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
US retail sales in nominal terms rose 0.2% MoM in Jun, versus 1% in May
As expected; retail sales ex-auto & gas rose 0.4% MoM in Jun, versus 0.8% in May
Downtick primarily driven by lower fuel prices; wealth effects underpin spending resilience
US NAHB housing market index fell to 34 in Jul, from 36 in Jun
Below expected 35
Elevated interest rates and tepid demand are weighing on sentiment
Brazilian retail sales in real terms rose 0.4% YoY in May, versus 1% in Apr
Weaker than expected 1.2%
Resilient jobs market points to modest rebound in consumption
Singapore non-oil domestic exports rose 20.7% YoY in Jun, versus 38.4% in May
Weaker than expected 28.7%
Volatile series; underlying trend shows strong demand, especially for AI-related goods
Test Your Knowledge
After China and the US, which country is building the most ambitious battery storage capacity?
- Australia
- Saudi Arabia
- Germany
- Japan
Chart of the Week
Leaders at last week’s Nato summit reassured the defense industry by affirming the 5% of GDP target for defense spending by 2035 and giving clarity on long-term demand. Germany is the main driver: its plans alone imply about €270bn in additional cumulative spending over 2026-30. European defense stocks had consolidated for several months leading up to the summit. But with defense investment already rising faster than overall budgets, the announcement of greater procurement targets should support the sector’s earnings. And even if some countries are likely to fall short, substantial spending is set to flow into the sector and support the rebuilding of Europe’s defense industrial base.
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
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?
The War Has Ended And Capital Will Rotate Out Of US Assets
It is well known that the first casualty of war is truth. As such, investors could only assume that every market-moving statement from any of the main belligerents in the Iran-Israel-US war that started on February 28 was possibly a lie. In turn, this meant that every financial market in the world was possibly trading at “false prices,” making rational investment analysis very challenging. This situation has now completely changed.
Takeaways From The Iran Peace Deal
A number of “Iran peace deals” have been proclaimed over the past two months. However, this latest one does feel more genuine than its predecessors. Assuming that by next weekend, the Strait of Hormuz is once again open to maritime traffic, and that the Gulf states no longer have to worry about drone or missile strikes, what should be our takeaways?
US economy & markets
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.
The Case For US Bank Stocks
While the S&P 500 index has moved sideways since June 1, the S&P 500 Banks index has gained a robust 13%. This marks a sharp reversal from the first five months of the year. The recent outperformance suggests investors’ concerns are easing. More importantly, the fundamental backdrop for US banks has strengthened considerably.
What’s Driving The Dollar
When the Iran war started, the US dollar strengthened on a flight to safety. This raised the possibility that with peace, the dollar could weaken again on renewed capital outflows. Instead, the US currency has strengthened further, with the DXY index hitting a 13-month high Wednesday. What is behind this rally? The following factors are worth considering.
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: Breakdown Or Buying Opportunity For US Bonds?
Will Denyer
15 Jul 2026
Tuesday brought a series of developments with major implications for the US interest rate outlook, from the latest CPI release and the US president's apparent Taco over his Strait of Hormuz toll threat to Kevin Warsh's first semi-annual Congressional testimony. In this interview, Will explains what these events mean for interest rates and the outlook for US bonds.
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
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.
China, Germany And Eastern Europe’s Factory Hub
European policymakers fear a second “China shock” could devastate the continent’s manufacturing base, with the Visegrád Four seemingly among the most exposed. Yet the evidence points to a more nuanced story for the Eastern Europe group.
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
Energy Markets Are Too Complacent
Video: Oil After Hormuz
The State Of World Oil Stocks
Geoeconomic Monitor: After Beijing
Copper, Oil And Gold
The Message In The Oil Curve
