Core Viewpoint - VanEck has declared 2026 a "risk-on" year for investors, highlighting opportunities in artificial intelligence, private credit, and gold despite Bitcoin's deviation from its traditional four-year cycle [1] Economic Outlook - The Q1 2026 outlook from VanEck emphasizes unprecedented visibility into fiscal and monetary policy, contrasting with previous years of economic uncertainty and differing from Goldman Sachs' forecast of 11% global stock returns primarily from equities [2] - Improved clarity in fiscal and monetary policy is attributed to Treasury Secretary Scott Bessent's influence on Federal Reserve policy direction [2] Monetary Policy Insights - Bessent's interview suggests that current interest rates are at "normal levels," indicating that aggressive cuts are not necessary, with market expectations for rate adjustments limited to 25 to 50 basis points through 2026 [3] - Bessent criticized excessive quantitative easing post-COVID, linking it to the ongoing 10% inflation affecting Americans [4] Fiscal Stability and Growth Projections - The US fiscal picture shows significant improvement, with deficits projected to decline to 5.5% of GDP or less in fiscal 2026, contradicting more pessimistic Wall Street forecasts [5] - GDP growth could exceed consensus estimates, with Bessent suggesting analysts are significantly underestimating growth potential, as fourth-quarter 2025 growth reached 4% [6] Market Sentiment and AI Opportunities - Concerns exist regarding the selection of a new Fed chair in May 2026 and potential influence from Donald Trump, but Bessent's groundwork suggests a smooth confirmation process [7] - AI valuations have reset to attractive levels following corrections in late 2025, with companies reliant on debt for data center buildouts experiencing stock price declines exceeding 50% from summer peaks [8]

Investment Strategy - BlackRock is going risk-on for 2026 [1]

Core Viewpoint - The article emphasizes that the non-ferrous metals sector has been quietly gaining momentum prior to the recent interest rate cuts by the Federal Reserve, which have now catalyzed a significant rally in commodity prices, particularly copper, aluminum, and gold [1][5]. Group 1: Market Dynamics - The non-ferrous metals ETF (512400) has shown a remarkable increase of 59.6% since its low on April 7, 2025, indicating a strong recovery in the sector even before the interest rate cuts [1][3]. - The recent interest rate cut by the Federal Reserve has triggered a "risk-on" sentiment in global markets, leading to a synchronized jump in prices of copper, aluminum, and gold [1][5]. Group 2: Fundamental Drivers - Three key factors are driving the non-ferrous metals sector: macroeconomic tailwinds, supply-demand gaps, and earnings realization [7]. - The global easing cycle has begun, with historical data showing that gold prices typically rise by an average of 10.43% within six months following the first rate cut, with the highest recorded increase being 40.85% [8]. - Domestic policies aimed at reducing "involution" are expected to support demand for industrial metals like copper and aluminum through increased infrastructure and manufacturing investments [8]. Group 3: Supply Constraints - The copper smelting industry has seen a decline in processing fees, forcing production cuts, while demand from emerging sectors such as electric vehicles and renewable energy continues to rise [10][12]. - The aluminum sector is nearing its production capacity ceiling, with minimal net capacity increases projected for 2024 and 2025 [12]. - Prices of energy metals, including lithium and cobalt, remain high due to export controls and supply-side disruptions [13]. Group 4: Earnings Performance - The non-ferrous metals industry reported a significant increase in net profit, reaching 956.36 billion yuan in the first half of 2025, a 36.78% increase year-on-year [15]. - The industry’s earnings growth is accompanied by a low valuation, with the index's price-to-earnings ratio at a 37% percentile over the past decade, indicating potential for further upside [15][16]. Group 5: Investment Strategy - Investors are encouraged to consider the non-ferrous metals ETF (512400) for exposure to the sector, as it encompasses a diverse range of metals and reduces individual stock risk [19][24]. - The article suggests that the ETF serves as a comprehensive tool for capturing the cyclical benefits of the non-ferrous metals market without the complexities of stock selection [24].