Investment Trends - Corporate investment in India is showing signs of revival based on difficult-to-ignore data [1] Market Sentiment - India's "Animal Spirits" are reviving, suggesting increased confidence and risk appetite in the market [1] Disclaimer - The author acknowledges that the hypothesis of reviving animal spirits may not be universally accepted, but encourages readers to consider the data before reacting [1]

Summary of the 2026 Asia EM Equity Outlook Conference Call Industry Overview - Focus on Asia Emerging Markets (EM) equity outlook for 2026 - Emphasis on macroeconomic uncertainty and market risk management Key Points and Arguments 1. **Market Risk Positioning**: - Recommendation for tight market-risk positions against benchmarks with a slight preference for Japan over other emerging markets in 2026 [14][22][26] 2. **Stock Selection Strategy**: - Emphasis on stock selection through GEM, APxJ, China, Japan, and Thematic Focus Lists to generate alpha amidst macro uncertainty [14][22] 3. **Earnings and Valuation Targets**: - Raised base case targets while highlighting a wider bear to bull spread; moderate optimism on China with an equal-weight recommendation [14][26] - Specific earnings per share (EPS) targets for Japan's TOPIX index: ¥185 (+9%) for F3/25, ¥198 (+7%) for F3/26, and ¥225 (+14%) for F3/27 [26] 4. **Regional Allocations**: - Small overweights in India, Brazil, UAE, and Singapore; underweights in Saudi Arabia, Indonesia, and Taiwan [14][22] - Core overweights in Financials, Consumer Discretionary/E-commerce, and Industrials; underweight in Energy and Materials [14] 5. **Market Performance Rankings**: - Historical performance rankings indicate Japan, Hong Kong, and India as top performers in various years, with significant fluctuations in other markets like Brazil and China [18][19] 6. **Valuation Metrics**: - Forward P/E ratios forecasted: 15.0x for Japan, 13.0x for EM, and 12.7x for China [36] - Consensus EPS trends show positive revisions for Japan and China, with EM moving to neutral [32][34] 7. **Market Index Targets**: - MSCI EM index target set at 1,800 for December 2026, with a current price of 1,372 [26] - TOPIX index target set at 4,250 for December 2026, with a current price of 3,300 [26] Additional Important Insights - **Earnings Revision Breadth**: Positive for Japan and China, indicating potential upward momentum in earnings forecasts [32] - **Active Allocations**: Current active allocations show a preference for Japan and India, with adjustments in Taiwan and Saudi Arabia [38] - **Long-term Structural Trends**: Expectation of an extension of the post-2013 structural uptrend for the TOPIX index [22] This summary encapsulates the critical insights and recommendations from the conference call, providing a comprehensive overview of the Asia EM equity outlook for 2026.

Group 1 - The article does not provide any specific content related to a company or industry [1]

Market Volatility and Gold Performance - The current market is characterized by unusual volatility, particularly in developed market currencies compared to emerging market currencies, which are performing relatively well [2] - Gold has emerged as the best performing asset class year to date, driven by several factors including investors hedging dollar exposure, its role as collateral for digital assets, and increased retail participation [2][3] - Historical data indicates that gold has similar returns to equities but with twice the volatility, a trend that appears to be continuing [4] Equity Market Dynamics - Despite some trade-related wobbles, the equity market is experiencing a "melt up" quality, inching towards new highs, while equity market volatility is at its highest level outside of recession years [5] - The current environment shows a significant upward movement in volatility, with a prevailing sense of euphoria in the market, attributed to a strong economic contribution expected to benefit other sectors [6] - GDP estimates for Q3 are projected at 3.9% with inflation at 3%, alongside expectations of interest rate cuts and deregulation, which are contributing to heightened market optimism [7]

Core Insights - The article discusses the unusual behavior of gold prices and how traditional asset patterns are no longer applicable in current markets [1] - It highlights the contrast between the calm appearance of equities and the underlying market dynamics driven by euphoria, easy monetary policy, and expectations of interest rate cuts [1] Market Behavior - Gold has experienced sharp price swings, indicating volatility in the market [1] - Traditional relationships between different asset classes are breaking down, suggesting a shift in market dynamics [1] Investor Sentiment - There is a growing sense of "animal spirits" among investors, fueled by optimistic market conditions [1] - The article suggests that while equities may seem stable, there is significant underlying excitement and speculation [1]

Market Overview - The Russell 2000 Growth Index closed the third quarter up 12.2%, outperforming the Russell 1000 Growth Index which returned 10.5% [2] - Performance was driven by low-quality stocks, with the lowest-return on equity quintile up 22%, non-earners up 23%, and stocks with no sales up 19% [3] Macroeconomic Factors - The passage of the reconciliation bill and various trade deals reduced market uncertainty, contributing to solid consumer spending and business activity [4] - The Federal Reserve initiated a rate-cutting cycle, starting with a 25 basis point cut in September, which is expected to support market stability and M&A activity [5] Portfolio Performance - The ClearBridge Small Cap Growth Strategy underperformed its benchmark, with gains in industrials and health care sectors but weakness in IT and consumer discretionary sectors [6][16] - Weak traffic data in the consumer discretionary sector impacted holdings like Shift4 Payments, Dutch Bros, and Wingstop, although these companies are viewed as having strong future growth potential [7] Sector Highlights - The industrials sector showed positive performance, particularly in aerospace and defense holdings, while health care also performed well, especially in biotech [9][10] - The IT sector experienced divergent performance, with concerns around AI disintermediation affecting many software stocks [8] New Investments - Seven new investments were added during the quarter, including Karman Holdings and Kratos Defense & Security Systems, which are positioned for significant growth in defense and aerospace [12][21] - Exited positions included Blueprint Medicines and Integral Ad Science due to acquisitions and other fundamental considerations [12] Outlook - The company remains focused on identifying strong growth opportunities despite macroeconomic uncertainties, emphasizing a balanced approach to risk and opportunity [13][15] - The improved stability in government policy and trade dynamics is expected to support broader market participation and investment in higher-quality businesses [14]

Group 1: Market Overview - The S&P 500 index has shown fluctuations, reflecting broader market trends and investor sentiment [1] - Recent performance of Kohl's Corp indicates challenges in retail, with a focus on adapting to changing consumer behaviors [1] - GoPro Inc continues to innovate in the action camera market, aiming to capture a larger share despite competitive pressures [1] Group 2: Company-Specific Insights - Kohl's Corp reported a decline in sales, prompting strategic reviews to enhance customer engagement and operational efficiency [1] - GoPro Inc's latest product launch has received positive feedback, suggesting potential for revenue growth in the upcoming quarters [1] - Tilray Inc is navigating regulatory changes in the cannabis industry, which may impact its market positioning and growth strategies [1]