Most recent
Gavekal Research
Geoeconomic Monitor: New Alliance, Old Fears
Tom Holland, Tom Miller
21 Aug 2026
The signing of a new mutual defense pact by Saudi Arabia, Turkey and Pakistan has caused alarm in the Middle East and beyond. Tom Holland argues that in a post-war world in which the US is likely to scale back its presence in the region, the new agreement will boster security and investment in Western Asia, rather than exacerbate existing tensions. Tom Miller looks at the impact of Black Sea shipping disruption on global wheat supplies.
Gavekal-IS
The Macroeconomics Of AI: Part II
Didier Darcet
21 Aug 2026
In the second part of his series on the macroeconomics of AI, Didier argues that the economic impact of artificial intelligence will depend not just on technological progress, but on how widely it diffuses through the economy. Countries do not need to develop the world’s best AI models to reap the productivity gains and can instead win the race by diffusing the technology across their economies. This sets up an emerging contest between the US model of proprietary AI leadership and China’s push to spread cheap, open-source technology around the world.
Gavekal Research
A World In Disequilibrium: The US, Germany And France
Charles Gave
21 Aug 2026
Notwithstanding this week’s bond market moves, investors are acting as if we are still in a normal world. We are not. We have not been there for quite a while, and the great white shark is still lurking under the surface. Charles looks at some of the disequilibria that still exist with Maurice Allais's golden rule in mind, starting with long rates in the US, Germany and France.
Gavekal Dragonomics
Video: Unpacking China’s Government Subsidies
Thomas Gatley
20 Aug 2026
China’s industrial-policy support for domestic companies has raised hackles abroad, prompting allegations of unfair competition and excess capacity—and in turn rebuttals from Beijing. But what do listed-company data reveal about such government aid? In this video, Thomas explains how much state support the firms receive, how it is changing and why it relates to the recent string of blockbuster IPOs.
Gavekal Dragonomics
The Service Sector Is Back In Favor
Andrew Batson
Growth Slips Again
Wei He, Dragonomics Team
Can Deregulation Drive Services Spending?
Ernan Cui
These Unemployment Numbers Are Going Up
Andrew Batson
The Offshore Tax Grab
Xiaoxi Zhang, Christopher Beddor
Gavekal Research
EMs Are The New DMs
Udith Sikand
Did Bessent Just Put A Cap On The US Dollar?
Louis-Vincent Gave
Time For The PBoC To Come And Rescue The Capitalist World
Charles Gave
Putting In More Buffers
Louis-Vincent Gave
Profit Maxing And Social Anti-Fragility
Louis-Vincent Gave
Gavekal Technologies
China Wind Power’s Global Challenge
AJ Cortese
The Next Stage Of The LLM Race
Laila Khawaja
The Tech Truce Starts To Fray
Arthur Kroeber, Laila Khawaja, AJ Cortese, Tom Hancock
China’s Export Engine Meets Europe’s Carbon Rules
AJ Cortese
On The Ground At The 2026 World AI Conference (Part II)
Laila Khawaja, Huang Shichan
Gavekal-IS
The Macroeconomics Of AI In Simple Terms
Didier Darcet
Currency Momentum Trading
Didier Darcet
The End Of The Risk-Free Asset
Didier Darcet
The Great Confusion Over Economic Quadrants
Didier Darcet
The Bond Portfolio For A Swiss Investor
Didier Darcet
Gavekal Research
Who Is Copying Who? Part IV
Louis-Vincent Gave
27 Jul 2026
The growing push to restrict Chinese AI models could mark a major escalation in US-China tensions—and a watershed for the US economy. Louis argues that a ban would protect US tech giants at the expense of start-ups, consumers and productivity, while accelerating the fragmentation of the global technology system. Over time, the result could be weaker US equities, a softer dollar and higher bond yields, raising the question of whether such a policy would truly serve the public good or merely entrench corporate power.
Checking The Boxes
Our short take on the latest news
Fact
Surprise
Takeaway
US Philly Fed business outlook index rose to 47.4 in Aug, versus 41.4 in Jul
Above expected 24.8
Volatile series; together with other regional surveys indicates improved mfg outlook
Sweden left benchmark rate unchanged at 1.75%
As expected; CPI ex-fresh food & energy rose 1.9% YoY in Jul, versus 1.7% in Jun
Riksbank on extended pause, but upside risks to inflation mean rate hikes now on table
Japan CPI rose 1.9% YoY in Jul, versus 1.6% in Jun
As expected; CPI ex-fresh food & energy rose 1.9% YoY in Jul, versus 1.7% in Jun
Reinforces case for BoJ to tighten sooner rather than later
Taiwan export orders rose 61.9% in Jul, versus 59.4% in Jun
Above expected 52.7%
Strong AI-related demand continues to bolster export outlook
Test Your Knowledge
What has been blamed for the recent jump in Chinese stocks with “niu” (meaning cow) in their names?
- A low-budget movie featuring a cow going viral
- Speculative buyers jumping on the visit of Unitree's CEO to a ranch to study bovine movement for their quadruped robots
- A quant fund’s hallucinating AI mass-buying cow-named stocks instead of bull-market stocks
Chart of the Week
Total global exports of AI-enabling goods have surged 28% compared to a year ago; this supply has been dominated by Asian countries like Taiwan and South Korea, which have posted double-digit spikes. But there are more winners from the AI boom. Mexico and Malaysia have emerged as major hubs for downstream parts of the AI supply chain such as assembly, testing and packaging. Hong Kong and Singapore are also experiencing spillovers, prompting upgrades to their macroeconomic outlooks for 2026. Though not usually seen as beneficiaries of the AI trade, the territories serve as crucial hubs for re-export and transmission, facilitating much of the tech trade in and out of Asia.
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 Limits Of Economic Fury
The US administration is now switching its focus to a campaign of “economic fury” in an effort to achieve its strategic aims against Iran. It is not obvious that this latest phase of the conflict is any more likely to result in a quick and easy US victory than the kinetic war. However, the
economic implications of a prolonged stand-off may be less ominous than they at first appear.
Geoeconomic Monitor: Dominance And Decline
One upshot of the wars in the Persian Gulf and Ukraine is that the US oil and gas industry is booming. The drawback is that US consumers are paying twice Trump's target price for gasoline. With the midterms approaching, there is a risk the US administration might decide export controls are the only way to square the circle, writes Tom Holland. Meanwhile, Cedric Gemehl looks at how Germany is warming to the idea of protectionist measures to insulate its industries from Chinese competition.
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?
US economy & markets
Five Risks To Equity-Led US Growth
The US economy and equity market have become increasingly intertwined, with rising stock prices supporting consumption and capital spending, strengthening economic growth and, in turn, equities. This virtuous cycle has healthy momentum, but when everything is going well, prudent investors search for potential pitfalls. Kai Xian identifies five potential factors that could pose a risk to the equity-led boom.
How Sustainable Is The AI Capex Boom?
The AI capex boom is supporting economic growth, equity markets, and bond yields around the world. If the boom rolls over, it will not only weigh on the profits of companies directly exposed to AI capex spending, such as Nvidia. It would weigh on corporate profits throughout the economy. This means investors need constantly to be on the lookout for threats to the AI boom and signs that capex is rolling over.
Less Than Zero
Emboldened by the continued climb of stock prices, Americans are spending more of their incomes, and saving less. If the savings rate continues to decline, individuals will at some point be spending more than they earn. If they want to maintain their spending, they will have to either borrow or sell assets. These two courses have very different macroeconomic implications.
The (Better) Case For European Banks
After more than a decade in the wilderness, European bank stocks have now had four good years, outperforming their US counterparts since 2022 in US dollar terms. The question is whether this outperformance can continue. The short answer is yes. European bank stocks are no longer priced at distressed levels, but with the earnings outlooks for European and US banks both solid, there is still room for European valuations to improve compared with the US.
China chartbook
Gavekal Dragonomics
Macro Update: Pushed And Pulled
Wei He, Dragonomics Team
3 Aug 2026
China’s economy is being pushed and pulled by two external shocks: the supply shock from the Iran war and the demand shock from the AI capex boom. Both are creating lots of volatility in trade flows, prices and profits, although the underlying trend of the domestic economy has not yet changed much. Neither are China’s policymakers showing much sign of significantly changing course. In our latest quarterly chartbook, Wei and the Dragonomics team diagnose the current situation and the policy outlook.
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 Dragonomics
Video: Unpacking China’s Government Subsidies
Thomas Gatley
20 Aug 2026
China’s industrial-policy support for domestic companies has raised hackles abroad, prompting allegations of unfair competition and excess capacity—and in turn rebuttals from Beijing. But what do listed-company data reveal about such government aid? In this video, Thomas explains how much state support the firms receive, how it is changing and why it relates to the recent string of blockbuster IPOs.
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
EMs Are The New DMs
Emerging-market bonds have dramatically outperformed their developed-market peers since 2020, helped by greater policy credibility, deeper domestic financial markets and reduced reliance on foreign investors. With DM bond yields now hitting multi-year highs, policymakers may increasingly look to the EM playbook, including softer forms of financial repression, to stabilize their markets, says Udith. From the US to Japan, signs of this shift are already emerging, suggesting that EMs may have a thing or two to teach DMs.
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.
Europe's economy
Europe’s Public Investment Boom Changes Shape
The end of the EU’s post-Covid investment program at the end of this month will bring a significant shift in Europe’s public investment cycle, but not necessarily the investment cliff that might have been feared. As Brussels-funded civilian spending winds down, investment will rotate toward defense and geographically from Southern and Eastern Europe toward Germany and Northern Europe. August examines how these shifts will reshape Europe’s growth impulse in 2027 and change the beneficiaries of public spending.
The (Better) Case For European Banks
After more than a decade in the wilderness, European bank stocks have now had four good years, outperforming their US counterparts since 2022 in US dollar terms. The question is whether this outperformance can continue. The short answer is yes. European bank stocks are no longer priced at distressed levels, but with the earnings outlooks for European and US banks both solid, there is still room for European valuations to improve compared with the US.
Europe’s Broad Earnings Recovery
Investors who question the sustainability of the AI earnings boom, but who nevertheless want to retain some exposure to the growth of artificial intelligence, may want to look again at European equities. Today, Europe offers a powerful earnings-recovery story, with a significant AI element. But best of all, the continent’s earnings growth is diversified across a broad range of sectors, and therefore stands a good chance of surviving even if the AI boom turns to bust.
Foreign Issuers Flock To Euro Debt
Record numbers of non-resident issuers are tapping the eurozone’s debt market in order to take advantage of favorable funding costs. But far from crowding out domestic borrowers, the influx of foreign issuers is deepening euro-denominated debt markets to the benefit of local issuers, writes August.
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
Video: Towards An Uncertain Winter For Energy
The Quid Pro Quo That Wasn’t
The Energy Risk Remains (Part I)
Energy Markets Are Too Complacent
Video: Oil After Hormuz
The State Of World Oil Stocks
