Clockwise: Cautiously optimistic into year-end

RLAM has turned more positive on equities because resilient growth, strong earnings and deeply oversold sentiment outweigh the risks from AI financing, geopolitics and monetary policy.

• Brent crude stood near $90 a barrel on 10 November 2026, around 50% above its level at the start of the year, while the US-Iran conflict was entering its ninth month.
• The Investment Clock is moving from Stagflation towards Overheat as economic activity remains resilient and forward-looking data improve, a historical setting that has favored equities and commodities over bonds.
• Global AI-related capital expenditure is expected to approach $1tn in 2026, supporting manufacturing PMIs and corporate earnings as hyperscalers deploy large cash balances into data centers and related infrastructure.
• Global equity earnings growth is running above 20% year on year, with analysts expecting about 30% growth over the next 12 months, the strongest forward rate since immediately after the Global Financial Crisis.
• AI dependence has increased market risk as hyperscalers issue more debt, credit spreads widen and technology stocks lead losses after doubts about data-center spending and AI financing.
• Over the past 75 years, the S&P 500 gained an average of 13% in the six months after US midterm elections, with every period in the sample delivering a positive return.

Takeaway: RLAM sees the recent sell-off as an opportunity to add equity risk while keeping portfolios diversified across equities, commodities and property, with lower dependence on a small group of US technology stocks and continued caution around AI investment, geopolitics and monetary policy.