Core Viewpoint - Emerging market bonds and stocks recorded double-digit percentage increases in 2025, with a general positive outlook for 2026 among investors [3][4]. Group 1: Performance of Emerging Markets - Emerging market local currency bonds rose by 18% and stocks increased by 26% in 2025, marking the first time since 2017 that emerging market stocks outperformed U.S. stocks [5]. - The yield spread between emerging market bonds and U.S. Treasury yields narrowed to its lowest level in 11 years [5]. - The Bloomberg Emerging Market Carry Index achieved a return of 16.71% in 2025, the best since 2009 [5]. Group 2: Investor Sentiment - A recent survey by Bank of America involving 300 investors showed a lack of pessimism towards emerging markets, with a significant shift in sentiment [6]. - HSBC's December survey indicated that bearish views on emerging market prospects have completely disappeared, reaching a historical high in net bullish sentiment [6]. - U.S. ETFs focused on emerging market stocks attracted nearly $31 billion in 2025, while emerging market bond funds absorbed over $60 billion [6]. Group 3: Future Outlook for 2026 - Analysts maintain a positive outlook for emerging market assets in 2026, with expectations for high yields and diversification benefits from emerging market bonds [8]. - Focus areas for investment include Central and Eastern Europe, parts of Latin America (like Colombia and Brazil), and Asia (including India, the Philippines, and South Korea) [8]. - The Chinese stock market is expected to see investments in technology sectors and industries with clear advantages, such as the electric vehicle supply chain and renewable energy [8]. Group 4: Economic Context - The global economic growth for developed markets is projected to be around 1% to 1.5%, while emerging markets are expected to show relatively strong growth [10]. - The dollar is anticipated to remain under pressure due to policy divergence and trade tensions, although a short-term rebound is possible [10]. - The investment focus is expected to shift towards global diversification, with emerging markets showing improved fundamentals [10]. Group 5: Currency and Arbitrage Strategies - The trajectory of the U.S. economy is crucial for the sustained strong performance of emerging market currencies [11]. - Investors are advised to consider the potential for continued low volatility in emerging market currencies, which could impact overall returns [13]. - Major financial institutions like JPMorgan and Morgan Stanley predict significant inflows into emerging market bonds due to a weak dollar and the AI investment boom [11].

Core Viewpoint - Emerging market assets are expected to perform well in 2026, with a general consensus among institutions that there is little pessimism regarding these markets [1][4][6]. Group 1: Market Performance - Emerging market local currency bonds have risen by 18% and stocks by 26% in 2025, marking a significant recovery from previous years [3]. - Emerging market stocks have outperformed U.S. stocks for the first time since 2017, and the yield spread between emerging market bonds and U.S. Treasuries has narrowed to its lowest level in 11 years [3]. - The Bloomberg Emerging Market Carry Index has achieved a return of 16.71% this year, the best since 2009 [3]. Group 2: Investor Sentiment - A recent survey by Bank of America involving 300 investors revealed that there is almost no pessimism towards emerging markets [4]. - HSBC's December survey indicated that bearish views on emerging markets have completely disappeared, with net bullish sentiment reaching a historical high [4]. - Strategas estimates that U.S. ETFs focused on emerging market stocks attracted nearly $31 billion in 2025, while emerging market bond funds absorbed over $60 billion [4]. Group 3: Economic Outlook - Emerging markets are expected to benefit from a more accommodative global financial environment and stable internal policies, with growth anticipated to outperform developed economies [6]. - The Asian region is highlighted as a key growth engine, with potential for pro-business governments emerging from elections in Latin America [6]. - Structural trends such as geopolitical reshuffling and supply chain restructuring are expected to favor emerging markets, particularly in Asia [5]. Group 4: Investment Strategies - Emerging market bonds are seen as attractive due to high yields and diversification benefits, with a focus on Central and Eastern Europe, parts of Latin America, and Asia [6]. - Investment in technology sectors and industries with clear advantages, such as the electric vehicle supply chain and renewable energy in China, is recommended [6]. - The outlook for Indian markets is positive, driven by the "Make in India" initiative, which is expected to boost manufacturing and infrastructure [6]. Group 5: Currency and Interest Rate Dynamics - The trajectory of the U.S. economy is crucial for the sustained strong performance of emerging market currencies, with expectations of a slowdown encouraging the Fed to maintain loose monetary policy [9]. - JPMorgan and Morgan Stanley predict that emerging markets will benefit from a weaker dollar and the investment boom in AI [9]. - Emerging market currency volatility is currently low, but there are concerns that unfavorable exchange rate movements could erase gains [11].

Core Viewpoint - The SEC's recent decision to allow dual share classes for ETFs and mutual funds marks a significant development in the investment landscape, reflecting the ongoing ETF boom and the increasing adoption of ETFs by traditional money managers [2][4]. Group 1: SEC Announcement - The SEC will permit numerous issuers to offer ETF share classes of mutual funds and vice versa, contingent on no hearings being ordered against the applications [2][6]. - This announcement is the SEC's first on the topic since November, when it approved a proposal from Dimensional Fund Advisors [2]. Group 2: Market Impact - The approval of dual share classes is expected to ignite interest among traditional managers who have not previously engaged in the ETF space, providing them access to new channels [3][4]. - The dual-share-class structure offers benefits such as tax efficiency and liquidity, potentially enhancing mutual fund structures and retirement accounts [4]. Group 3: Operational Challenges - Despite the advantages, traditional managers may face logistical and operational hurdles as they adapt to the ETF model, particularly regarding in-kind custom baskets [4]. - Smaller money managers may need to rely on external expertise to successfully launch their funds, while larger managers may already have the necessary resources [4]. Group 4: Future Considerations - Liquidity will be a critical factor to monitor, as many funds will need to maintain higher cash or liquid asset holdings, which could lead to increased underlying fees [5]. - The SEC's notice applies to 30 asset managers, including major firms like BlackRock, PIMCO, and JPMorgan, with petitions for dual share classes potentially being granted as early as January 12 [6].

美国第二大银行——美国银行(BAC.US)——的股价在12月创下历史新高，终于超过了其在2006年、金 融危机前达到的峰值。美国规模最大的摩根大通(JPM.US)以及第四大的富国银行(WFC.US)的股价目前 也都处在历史高位。花旗集团(C.US)的股价则在七年来首次超过其每股账面价值，但仍较其2000年的历 史峰值低约80%。 一项追踪这些银行及美国另外20家最大放贷机构的关键指数——KBW银行指数(BKX)——今年迄今已 上涨29%，跑赢标普500指数13个百分点。富国银行分析师迈克.梅奥(Mike Mayo)表示："这无疑比我们 年初预期的上涨空间更大。"他补充称："大型银行在2026年将再次跑赢大盘。" 美国最大的银行正在以强势姿态结束2025年——股价创下历史新高，资产负债表规模更大，同时享有过 去15年来前所未有的监管自由度。在未来几年里，这个行业及其头部机构计划把这股势头转化为一段持 续的增长故事。 与此同时，自2025年年初以来，摩根大通的市值已增加约2000亿美元，使其更接近成为全球首家市值达 到1万亿美元的银行。自2019年以来，摩根大通一直向投资者承诺，在整个经济周期中实现17%的 RO ...

Core Viewpoint - Emerging markets are expected to become favored by Wall Street by early 2026, with asset management firms betting on a prolonged inflow cycle that has already begun [1][3] Group 1: Market Performance - Capital inflows into emerging markets this year have reached the best performance since 2009, indicating a shift in investor sentiment towards this previously underperforming asset class [1] - Emerging market stocks have outperformed U.S. stocks for the first time since 2017, and the yield spread between emerging market bonds and U.S. Treasuries has narrowed to the lowest level in 11 years [1] - JPMorgan forecasts that emerging market bond funds could see inflows of up to $50 billion next year, with expectations of price appreciation and yield benefits from local currency bonds [4] Group 2: Investor Sentiment - A recent investment conference by Bank of America revealed that nearly all investors are optimistic about emerging markets, with no significant pessimism reported [3] - AllianceBernstein's Sammy Suzuki noted a shift in perception, stating that questions about the investment value of emerging markets have diminished [3] - Gama Asset Management's Rajeev De Mello believes there is still room for significant over-allocation towards emerging markets [5] Group 3: Global Capital Flows - There is a potential fundamental shift in global capital flows, with portfolio managers eager to diversify away from the U.S. and attracted by progress in debt reduction and inflation control in developing countries [3] - Despite recent rebounds, the overall scale of capital inflows remains relatively small compared to previous outflows, indicating that emerging markets still have insufficient representation in global portfolios [4] Group 4: Risks and Challenges - The recent rebound in emerging markets may mask underlying vulnerabilities, particularly concerning the U.S. dollar, which has declined by 8% this year, providing support for emerging market assets [6] - Citigroup suggests that investors should only buy emerging market assets that can withstand a potential strengthening of the dollar [6] - As of mid-December, emerging market bond funds saw a significant inflow of $4 billion, marking the largest weekly inflow since July [7]

December 19, 2025 11:38 PM GMT Global Macro Strategist Top 10 Surprises for 2026 A year without surprises would be a surprise itself. We discuss 10 market surprises that could make investors think differently. Surprise #1: Jobless productivity bull-flattens UST curve: Supply-driven disinflation leads to lower term premia, and lower short rates lead to less deficit concerns, given issuance mix – flattening the yield curve vs. forwards. Surprise #2: Back to negative equity-bond correlations: With inflation ex ...

Core Viewpoint - Morgan Stanley is emerging as a competitive investment bank for SpaceX's potential IPO due to its long-standing relationship with CEO Elon Musk [1][3] Group 1: IPO Competition - The underwriting arrangement for SpaceX's IPO is not yet finalized, with several major investment banks, including Goldman Sachs and JPMorgan Chase, competing for key underwriting roles [3] - Although Morgan Stanley is considered a strong candidate for the lead underwriter position due to its historical ties with Musk, no final decisions have been made [3][4] Group 2: Historical Relationship - Morgan Stanley has a deep history of collaboration with Musk, having participated in Tesla's IPO in 2010 and advising Musk on the acquisition of Twitter (now X) in 2022 [4] - Musk appointed Anthony Armstrong from Morgan Stanley as CFO of his AI company xAI, further solidifying their relationship [4] Group 3: IPO Preparation - SpaceX's CFO Bret Johnsen indicated in an internal memo that the company is preparing for a public listing in 2026, although the timing and valuation remain uncertain [4] - The IPO could potentially raise over $25 billion, making it one of the largest public offerings globally [5] Group 4: Business Operations - SpaceX has evolved from a rocket launch company to the world's largest satellite operator with nearly 10,000 satellites, providing broadband services [6] - The IPO may encompass both rocket and satellite internet businesses, with funds raised aimed at increasing the launch frequency of the next-generation Starship rocket and supporting the development of AI data centers in space [6] - Starlink remains SpaceX's primary revenue source, and the company is expanding into wireless communication with initiatives like "Starlink Mobile" [6]

Core Insights - The article discusses a resurgence of traditional diversified investment strategies centered around index ETFs amidst an unprecedented AI investment boom in 2025, highlighting the strong performance of diversified asset allocation compared to concentrated bets on major tech stocks [1][3]. Group 1: Market Trends - In 2025, there is a noticeable rotation in global stock markets from tech stocks to value and cyclical sectors, indicating a shift towards diversified investment strategies that have generated significant excess alpha returns [1][3]. - Major Wall Street institutions, including Goldman Sachs and Morgan Stanley, predict a continued rotation in 2026 towards traditional value stocks, small caps, and cyclical sectors, suggesting that non-tech stocks may yield better returns than popular AI tech stocks [2][3]. Group 2: Performance of Investment Strategies - A simple stock-bond portfolio achieved double-digit gains in 2025, marking the best year since 2019, while multi-asset quantitative strategies significantly outperformed the S&P 500 index [4]. - Cambria Investments' ETF, which covers a broad range of global stocks, recorded its best annual performance, benefiting from strong gains in international markets outside the U.S. [4][11]. Group 3: Investor Behavior - Despite the strong performance of diversified strategies, there is a continued trend of investors moving away from these strategies, with diversified asset funds experiencing net outflows for 13 consecutive quarters [5][9]. - The article notes that while funds are flowing into pure equity and bond funds, the traditional diversified strategies remain out of favor among retail investors [9][21]. Group 4: Future Outlook - Analysts expect a broader bull market in 2026, with a focus on cyclical stocks benefiting from a "rolling recovery" phase in the U.S. economy, driven by improved corporate earnings and a favorable macroeconomic environment [15][18]. - The anticipated economic policies under the Trump administration are expected to favor commodity investments, suggesting a shift in investment paradigms towards fiscal expansion and de-globalization [20].

Core Viewpoint - Morgan Stanley is expected to become the lead underwriter for SpaceX's initial public offering (IPO), leveraging its close relationship with CEO Elon Musk [1] Group 1: IPO Preparation - Elon Musk has not yet selected the lead underwriter, but a decision may be made by the end of the year, with the full underwriting syndicate potentially finalized shortly thereafter [1] - Although preparations are underway, the IPO is contingent on market conditions, and SpaceX may choose to delay or abandon the listing altogether [1] Group 2: Morgan Stanley's Role - Morgan Stanley has provided advisory services to Musk for many years, including participation in Tesla's 2010 IPO, which involved a syndicate that included Goldman Sachs, JPMorgan, and Deutsche Bank [1] - The firm also acted as an advisor and led financing in Musk's acquisition of Twitter (now X) in 2022 [1] Group 3: Future Plans - SpaceX's CFO, Bret Johnsen, indicated in an internal memo that the company is preparing for a public listing in 2026 [1]

China now has 3.75 terawatts of power generation capacity, nearly three times more than the U.S., which has 1.30 terawatts, according to the power energy capacity cited by market commentator The Kobeissi Letter on Friday. China currently has 34 nuclear reactors under construction, more than the next nine countries combined, according to The Kobeissi Letter post on X. Nearly 200 additional reactors are planned or proposed. In contrast, the U.S. has no large commercial nuclear reactors under construction.Chin ...