Clients are disciplined, recognizing geopolitics rarely have long-lasting impact. The bigger long-term issue is global fragmentation raising the floor and volatility of inflation.

Portfolio diversification should include infrastructure, real assets, and commodities, not just bonds.

Supply chains are being reshaped by COVID and war, shifting focus from cost to reliability and security.

This creates an opportunity to invest in 'national champions' and strategic industries in infrastructure (US), defense (Europe), and tech (Asia).

AI investment shift happened when hyperscalers started funding capex via credit markets, making investors more discerning about 'effective spend'.

Good news: earnings revisions are moving higher and valuations have become more attractive after a pause, setting a lower bar for earnings season.

Base case: oil prices continue to gradually move lower to around $80/barrel over the next 3-6 months.

Scenarios: $100/barrel is tricky for markets (growth slowdown pressure on stocks, inflation pressure on bonds). $120-$140/barrel could lead to a modest recession, but this is a low probability outcome.

Opportunistically focused on shorter-term bonds (Treasuries, investment grade). Markets have repriced from expecting Fed cuts to a Fed on hold/potential hikes elsewhere.

For clients with lots of cash, this is an opportunity to extend duration slightly and pick up yield.

EM is a compelling opportunity due to strong earnings growth/revisions (especially in Asia/Korea/Taiwan linked to AI capex) and substantial valuation discounts.

Deglobalization and supply chain reorientation will benefit resource-rich regions like Latin America. No specific view on Africa.

Alternatives play a bigger role for clients with long-term, multi-generational horizons (family offices average 40% allocation) for enhanced returns and diversification.

On crypto: No strategic view to incorporate it into portfolios yet due to volatility; it's not a focus for diversification dollars but an area of ongoing research.