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

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

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

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.

So far this month, the S&P 500 index has returned more than twice its long-term average return for July. Notably, the S&P 500 Equal Weight index, which gives equal importance to small and large companies alike, reached two all-time highs last week from none for this year. The index’s two largest sectors are industrials and financials, sectors that follow the ups and downs of the overall economy. When many stocks are participating in an uptrend, it usually means the uptrend is stronger.

Meanwhile, the recent US-EU trade deal, which includes a 15% tariff on European goods, should put pressure on Mexico and Canada to get deals done by the Friday deadline. However, negotiations may not be as straightforward: Canadian Prime Minister Carney said last week that Canada "will not accept a bad deal", and Trump said, “We haven't really had a lot of luck with Canada. I think Canada could be one where there's just a tariff, not really a negotiation."

This week’s episode covers the S&P 500’s new record highs as US fiscal policy proves stimulative, despite ongoing tariff headlines and persistent inflation concerns. We examine the fresh trade deal with Indonesia, rising political uncertainty in Japan, and what August’s looming tariff deadline could mean for global trade. Q2 earnings season is underway, with strong results from US banks and tech stocks. We explore what these developments could mean for portfolio positioning amid shifting market dynamics.

This episode is presented by Eric Mak from the Equity Research Asia team at Julius Baer.