The coming week will be dominated by three forces: rates, corporate earnings and oil.
Analysis
In the US, weak job creation eases immediate pressure on the Fed, but inflation remains the constraint. Ten year yields around 5.3% are the real risk, able to overwhelm good equity news. In Europe, inflation and French fiscal stress continue to weigh on banks and long duration stocks. In Asia, Korean exports support the semiconductor cycle; Japan will be one to watch through rates and the yen.
Opportunity
The opportunity is the rotation from “AI winners” to the physical infrastructure underneath: chips, memory, optics, power and equipment. The watch point is weak market breadth: only 28% of S&P 500 stocks were above their 50 day average.
Investor outlook
Positive but selective outlook. In short: AI drives, rates decide, Europe worries, Asia confirms.
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