1. Warsh said the US economy has strengthened since the last Fed meeting.

Rising yields are supportive for value stocks, says JPMorgan.
“Growth’s premium over Value is stretched versus history. We see the rotation toward Value and Cyclicals extending over the coming months.”

Below: MSCI World Value P/Book relative to MSCI Growth

2. Higher rates won't derail earnings, says UBS.

According to Mark Haefele, chief investment officer at UBS Global Wealth Management, "further tightening by the ECB should not derail Europe’s improving earnings cycle."
Inflation might be sticky, but as there's little evidence of second-round effects so far, the need for an aggressive hiking cycle is limited, he explained.
"Meanwhile, global manufacturing is recovering, Germany’s fiscal expansion is gathering momentum, and investment in AI, electrification, defense, and automation is supporting demand," Haefele said.
"We now expect European corporate profits to grow by 15% in both 2026 and 2027, with the recovery broadening beyond energy and a narrow group of structural leaders," he added.
Below: The Eurozone economic surprise index has spiked to multiyear highs and positive surprises of this magnitude tend to precede further upward earnings revisions, reinforcing that the fundamental backdrop into Q3 is firm rather than fragile.

3. The robot industry has a huge bottleneck: actuators.

The ability to produce robots hinges heavily on the supply chain for actuators (motors, bearings, reducers, and sensors) that can account for up to 50%+ of a robot's bill of materials.
We project robotics to drive supernormal growth in actuator demand, with key component volume rising up to 200-400x (!!!) globally between 2025 and 2050.
And the US can barely make them without China.
The upcoming US-China summit is a catalyst worth watching as US national security concerns increasingly extend into the physical AI stack.
Below: Morgan Stanley has identified 12 public companies that are relevant to the US actuator supply chain.

4. The Hang Seng Biotech Index has risen nearly 22% this quarter.

China’s biotech stocks are emerging as the latest AI trade, fueled by expectations the technology will accelerate drug development and boost returns.
“AI-driven drug discovery is taking off in China and generating a lot of investor interest, owing to the speed and cost benefits that AI brings,” Citigroup wrote in a note this month. The sector’s low penetration of the projected $313 billion global pharmaceutical R&D market implies “significant room for growth.”
“China has a strong combination of scientific talent, a large innovative-drug pipeline and extensive drug contract manufacturing infrastructure for synthesizing and testing AI-generated molecules,” said Janus Henderson.

5. Buy blue gold!

Behind the billions being invested in artificial intelligence lies a far more tangible resource: water. From data centres to semiconductor plants, the digital revolution depends on ever-larger volumes of freshwater. As a result, water is at risk of becoming one of the key constraints on the further development of AI.
Enter Veolia, the largest global water player.
Veolia sees growth in water technologies expecting current net income to grow by at least 8%.
The message on long-term trends was reiterated, with management noting that recurring heatwaves, droughts and the disruption in the Strait of Hormuz reinforce the strategic value of Veolia's positioning around water security and local sourcing.
French stocks have been under pressure lately and Veolia is no exception but water is a strategic investment not a tactical trade.

Below: Veolia is oversold.

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