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1. US Stocks are most overbought since July 2024.

2. The Hang Seng Biotech index has surged more than 60% since the start of January, amid investor enthusiasm over several billion-dollar deals involving foreign firms licensing Chinese drugs.

A new class of cutting-edge cancer drugs developed in China is revolutionising the pharmaceutical industry and reshaping perceptions of Chinese biotech innovation.

Big pharma companies have taken notice, striking billion-dollar deals. At the heart of these blockbuster deals is a new class of oncology drugs, known as PD-1/VEGF bispecific antibodies, which attack cancer by targeting immune checkpoints and tumour-associated blood vessels simultaneously.

Industry insiders are dubbing this the “DeepSeek moment” — a point where domestic innovation converges with global relevance. “China’s innovative drug sector has arrived at that moment.”

3. Tesla = Musk.

“With the autonomous future ahead and the AI revolution in full force, Musk should avoid acts of provocation. Trump can create more hurdles for Musk as well as Tesla and SpaceX if the political battle intensifies heading into mid-term elections in 2026.”

Here is Tesla versus BYD.

Tesla: 384K (-14% Y/Y).

BYD: 607K (+42% Y/Y).

4. Currencies matter for equity investors.

The currency move affects equity investors, making European stocks cheaper for U.S. investors and Wall Street more expensive from Europe. The S&P 500 may be at a record high for domestic investors, but priced in euros it's 9% off its February top. "For euro-based investors the currency ate up so much U.S. assets' returns this year," said DWS' Ronner. "If there's another letdown, in euros that gets even worse." On the other hand, the STOXX 600 in local currency terms is still shy of March's record, but priced in dollars it hit an all-time high in late June.

5. A lot of optimism priced in cyclicals’ profit estimates.

That optimism is visible in both price action and profit expectations. It raises the stakes for the approaching earnings season, with risks for these stocks skewed to the downside.

By contrast, defensives could be the source of positive surprises.

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