Beyond Markets

The rapid pace of China's stock market rally in August has sparked concerns of a market bubble forming, with local regulators mulling measures to curb stock speculation. Are these concerns warranted, and is the end of the rally near?The Renminbi, in the meantime, continues to strengthen against the weakening US dollar, and gold has broken out again, making new all-time highs.Richard Tang, Head of Research Hong Kong at Julius Baer, and Hong Hao, Managing Partner and CIO of Lotus Asset Management Ltd., share their perspectives in this month's edition of China Conversations.

This week’s episode explores how artificial intelligence (AI) is boosting corporate profitability while reshaping the labour market. Since the launch of ChatGPT in late 2022, S&P 500 revenue per worker has climbed 15% after years of stagnation, but entry-level jobs are increasingly under pressure. The Federal Reserve’s focus has now shifted from inflation towards employment. Our economist expects five rate cuts by March 2026, though policy uncertainty and eroded trust keep our 10-year US Treasury yield forecast steady at 4.25%. History offers many examples of presidential overreach, episodes that typically prove temporary. With the Trump administration set to continue for another three and a half years, however, investors may feel compelled to exercise caution and consider diversifying beyond the US and the traditional financial system, including assets such as gold.

Fed Chair Jerome Powell clearly signalled at Jackson Hole that a rate cut at the Fed’s September meeting is likely. In this episode of the Beyond Markets podcast, Helen Freer talks to Julius Baer’s Head of Fixed Income Research, Dario Messi, about what a resumption of the Fed’s rate-cutting cycle would mean for bond markets. They also discuss the current fiscal concerns and the expected impact of tariffs on inflation, both in and outside of the US.(00:32) - Introduction (00:50) - What would the resumption of a rate-cutting cycle by the Fed mean for bond markets? (02:27) - What impact will the fiscal concerns have? (03:37) - What duration is currently appropriate in a bond portfolio? (04:32) - What impact might tariffs have on fixed income markets? (07:05) - Is the Fed’s independence really in danger? (08:46) - Should investors consider corporate credit exposure? (09:37) - Would exposure to European corporate bonds also be appropriate? (11:11) - Summary and closing remarks Would you like to support this show? Please leave us a review and star rating on Apple Podcasts, Spotify or wherever you get your podcasts.

Recent comments from Federal Reserve Chairman Powell suggest potential interest rate cuts, beginning in September. Meanwhile, the S&P 500 index has returned 30% since its April low, and the Dow Jones Industrials Average made a new high for the first time this year. The Shanghai Composite index has conclusively broken multi-year resistance. On the surface it’s driven by sentiment only, but China’s 10-year government bond yield bottomed in January and has been building a base since then. Government bond yields are often lead indicators. Additionally, a survey also shows a shift in consumer opinions, from very pessimistic to less pessimistic. In other developments, Singapore has replaced Thailand as Southeast Asia’s largest economy.

Investing in private markets has the potential to create long-term value in portfolios. But how can qualified and professional investors navigate the current marketplace? What does the private equity market look like today? Which factors are driving potential opportunities? And where might the risks lie?In this episode of the Beyond Markets podcast, Fiona Kenyon, Head of Private Markets Specialists at Julius Baer talks to Jack Weingart, Chief Financial Officer at the global alternatives firm TPG, to discuss these questions as they evaluate the current landscape and reflect on the potential risks and rewards.(00:30) - Introduction (01:22) - Private equity market landscape (02:38) - Focus on sector frameworks (04:07) - The impact of tariffs (05:27) - Likely level of deal activity in H2 2025 (07:46) - Fund liquidity and distributions to limited partners (09:15) - What private equity can bring to a portfolio (11:21) - The risks investors in private equity should be aware of (13:22) - Innovations: Evergreen structures (15:29) - The question of liquidity (16:55) - Summary and conclusion Would you like to support this show? Please leave us a review and star rating on Apple Podcasts, Spotify or wherever you get your podcasts.

Last week, OpenAI CEO Sam Altman said, “Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes”. Altman compared the widespread interest over Artificial Intelligence today, to the “tech bubble” of the late 1990s. But, the Magnificent 7 companies’ valuations today are less than half what the top five technology companies were, at the peak of the dot-com bubble.With over 90% of S&P 500 index companies having already reported their Q2 results, earnings growth is settling in at 12.0%, and the consensus forecast of 4.8% for Q3 is starting to look too low. Higher-than-expected July producer prices and nominal retail sales may both be signalling that the full impact of tariffs is yet to come. We expect producers to pass on the increased cost to consumers in the months ahead.

In this episode of Beyond Markets, Mark Matthews, Head of Research Asia at Julius Baer, speaks with General David H. Petraeus, Partner at KKR and former US Army General, about leadership lessons from his distinguished military career and how they translate to the corporate world. Their conversation explores recent conflicts, including the India–Pakistan skirmish, the US withdrawal from Afghanistan, and the Russia–Ukraine war, highlighting the critical role of deterrence. They also examine the future of US energy policy amid shifting dynamics in the Middle East and global oil markets, consider China’s growing influence in the Western Hemisphere and its implications, and explore regions with strong potential for development.(00:52) - Lessons from the General Petraeus’ military career (03:24) - Parallels with the corporate world (05:52) - Takeaways from the India-Pakistan and Russia-Ukraine conflicts (11:38) - Energy independence, and the future of US policy in the Middle East (19:47) - The effectiveness of US sanctions (25:30) - China’s growing influence in the Western hemisphere (29:01) - Growing interest in the Arctic (30:45) - Singapore and Dubai’s success story (34:00) - Countries with great potential and opportunities

The S&P 500 index made new highs last week, and results​ from the Q2 US earnings season have been amazing. With 90% of companies having reported, the blended earnings growth (actuals for reported and estimates for companies yet to report) is 11.8%, versus the consensus of 4.9% y/y earnings growth estimated in June. Yet strangely, the percentage of S&P 500 stocks trading above their 50-day averages has fallen from 80% in early July to 56%. That means a smaller number of stocks are taking the index up today than was the case then. ​We should never take averages​ as guaranteed outcomes for future performance. But for what it’s worth, August has historically been a “neutral” month on average, with a return since 1950 of zero. And September is the only month since 1950 with a negative average return.

Despite a lacklustre Chinese economy, the Hong Kong stock market has remained very popular, with the Hang Seng Index up 24% year-to-date. Concurrently, the Chinese Mainland A-share market has significantly underperformed the Hong Kong H-share market. What are the reasons behind these disparities in the Chinese stock markets? Does the Hong Kong market have further to run, and what are the sectors that are driving the market? This episode is presented by Richard Tang, Head of Research Hong Kong at Julius Baer, and Hong Hao, Managing Partner and CIO of Lotus Asset Management Ltd.

The US imposed an unexpected 39% tariff on Switzerland, sparking market concern. Although there are some caveats to the tariff terms, this development will have a material impact on the Swiss economy. However, there are still a few days to the tariff’s effective date of August 7th, so a deal is still possible. Meanwhile in the US, last Friday’s poor non-farm payroll numbers sent rate cut expectations for September up to 90%, and caused a 2% pullback in the US market. The Chinese market also suffered a week of correction. Despite these macroeconomic challenges, we remain constructive on China. This episode is presented by Richard Tang, Head of Research Hong Kong for Julius Baer.