1. A softer-than-expected employment report for June tempered expectations for interest-rate hikes by the Federal Reserve.

“With the Federal Reserve considering rate hikes, this is not necessarily a bad report for the stock market. Lower bond yields would likely be welcomed by technology investors, who have become increasingly concerned about the rising cost of the AI buildout," said Shawn Snyder, economic strategist at Potomac Fund Management.
"It doesn't mean the fear of inflation is over. It just takes the pressure off the Fed to raise rates in the short term," Sarhan said.

2. AI isn't killing jobs, on the contrary.

Firms that adopt AI heavily grow headcount 10% over two years following adoption. Low adopters see no statistically significant change.
Source: Financial Times

3. German reform package.

Germany's ruling coalition has finally unveiled a package of reforms that analysts believe can get the stuttering economy back on the right track.
"It is not a package that will morph a stagnating economy into a booming economy overnight. But it is a package that could create the preconditions, the framework, for future growth." Measures include pension changes, more affordable housing and tax relief for lower-income earners.
"Global investors have barely taken notice," says Deutsche Bank. Nevertheless, the German-based bank is still overweight German equities.
"With energy prices being back to pre-Iran war levels, investor attention moving away from the Iran war and proof of the much-needed reforms actually happening, we reiterate our call to be overweight German equities," they write.
"We see the biggest upside in German Mid and Small Caps, especially in direct beneficiaries of the fiscal stimuli into German infrastructure."
We are buyers of the ETF MDAX. The Index is comprised of 50 medium-sized German public limited companies from all industries that rank directly below the 40 large-sized companies which comprise the DAX.

4. Global asset allocation to gold is still small.

Private investors hold just 2.7% of financial assets in gold. In 1980 it was 8.3%.
Central banks sit at 26.6% versus 62.4% back then.

5. Relative valuations for Tech versus Defensives.

Not a subscriber yet?