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What’s in this issue;
Global markets came under pressure this week as a tech-led selloff spilled across Europe and the US, driven by renewed doubts over AI valuations and fading hopes of near-term rate cuts. Weak data from China and a sharp slowdown in the UK added to the macro gloom, while geopolitical risks and fiscal uncertainty amplified volatility across asset classes.
With Nvidia’s earnings, major retail results, and the return of key US economic releases now in focus, investors face a pivotal week for understanding whether markets stabilise—or whether the correction deepens. In this issue, we break down the drivers behind the pullback, the sectors best positioned for turbulence, and where selective opportunities may emerge amid the repricing.
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Where to Invest $100,000 According to Experts
Investors face a dilemma. Headlines everywhere say tariffs and AI hype are distorting public markets.
Now, the S&P is trading at over 30x earnings—a level historically linked to crashes.
And the Fed is lowering rates, potentially adding fuel to the fire.
Bloomberg asked where experts would personally invest $100,000 for their September edition. One surprising answer? Art.
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Why?
Contemporary art prices have appreciated 11.2% annually on average
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Ultra-high net worth collectors (>$50M) allocated 25% of their portfolios to art on average. (UBS, 2024)
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Weekly Movement - Heatmaps
US markets closed higher as more dovish comments from Federal Reserve officials boosted sentiment, helping ease worries about the economic outlook and lifting major indices.
In contrast, European equities ended broadly weaker, pressured by escalating fears that parts of the market — particularly technology and AI-linked stocks — may be entering bubble territory, which weighed on risk appetite across the region.
Meanwhile in London, the FTSE remained in the red but recovered from earlier lows, as UK traders also grappled with persistent concerns about an AI-driven bubble, though select defensive names and bargain hunting offered some stabilisation.
What Does This Mean For Investors
US markets look steadier for now, with dovish Fed signals easing recession and rate-risk worries — supportive for quality stocks but still dependent on upcoming data.
Europe and the UK are flashing valuation warnings, as rising fears of an AI/tech bubble suggest investors should stay selective and avoid overstretched names.
Expect continued volatility, making diversification and a focus on strong balance sheets more important than chasing momentum-driven trades.
What is Moving the Markets This Week
Nvidia Corporation’s Stunning Q3 Results
Nvidia reported a record revenue of $57 billion for Q3-FY2026, up roughly 62% year-on-year, with its data-centre business alone contributing about $51.2 billion.
The company forecasted around $65 billion in revenue for the next quarter — well ahead of many expectations.
Despite strong results, analysts still caution that “AI infrastructure spending” may not scale infinitely, and the notion of an AI “bubble” has not disappeared.
Investor takeaway: This shows how dominant Nvidia has become in the AI hardware race. If you’re investing in tech or AI-hardware, focus on who controls the underlying infrastructure (chips, data-centres) rather than just the “buzz” names. But also watch closely: the valuation stakes are very high.
Alphabet Inc. (Google) Launches Gemini 3
Google (Alphabet) launched its new multimodal AI model “Gemini 3,” which integrates directly into Google Search via an “AI mode”, making it instantly accessible to its huge user base.
Analysts see this as a strong strategic move against OpenAI and may shift the competitive landscape in generative-AI.
Investor takeaway: When big tech firms deploy new AI tools and embed them in widely used products (like search), it can boost user engagement and monetisation.
For investors, this suggests potential upside for companies with strong AI ecosystems — but again, it’s the execution and adoption that matter.
Valuation & Risk-Sentiment Under Pressure
The strong earnings and AI hype are fueling fears that certain sectors are overheated. NVIDIA’s results calm some concerns, but the sheer scale of expectations keeps valuation risk on the table.
Markets remain sensitive to whether central banks will keep rates high (or cut them) and how fast AI deployment translates into real-world profits across industries — not just hype.
Investor takeaway: In this environment:
Be selective: favour companies with proven business models and scalable AI advantages, not just hype. Keep valuation in check: high growth = high risk if expectations aren’t met.
Diversify: Tech/AI may lead, but risk-off periods call for balance (e.g., more defensives, different sectors).
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Top Economic News This Week
Japan and Switzerland Report Economic Contraction
Delayed GDP data showed that both Japan and Switzerland experienced a contraction in their economies during the third quarter of 2025, largely attributed to the impact of US tariffs and trade tensions on exports.
Context: Japan's GDP shrank by 0.4\% while Switzerland's contracted by 0.5\% in Q3. This highlights how ongoing global trade tensions and the rise in protectionist measures are negatively affecting export-driven economies, contributing to a challenging external economic environment.
Link for Context: Japan and Switzerland’s economies contract as US tariffs hit exports (The Guardian)
Moody's Upgrades Italy's Sovereign Credit Rating
Global ratings agency Moody's upgraded Italy's sovereign rating from "Baa3" to "Baa2," its first upgrade for the country in 23 years, citing a track record of political and policy stability.
Context: This upgrade, which also saw the outlook revised to stable, is a significant vote of confidence in the eurozone's third-largest economy. It is attributed to Italy's successful implementation of reforms under the European Union's National Recovery and Resilience Plan, suggesting that targeted policy stability can lead to stronger financial standing.
Link for Context: Italy Gets First Moody's Upgrade in 23 Years (Trading Economics)
Emerging Markets Briefing: A Shifting Global Economic Order
Emerging markets — now contributing nearly half of global GDP — are undergoing a major realignment. Geopolitics, trade diversification, and domestic resilience are reshaping the investment direction.
Long-term sentiment remains constructive, but the near-term outlook is still tied to global trade uncertainty and policy shifts.
Investment Spotlight: India & the Global South
India: The Standout Opportunity
Goldman Sachs Asset Management continues to position India as a top prospect heading into 2026.
Key drivers:
Demographic Strength: 65% of the population is under 35 — a powerful engine for consumption and labour supply.
Digital & Tech Boom: Rapid adoption of digital payments (like UPI), expanding AI capabilities, and rising chip design activity support long-term productivity gains.
Macro Stability: Consistent GDP growth and resilient earnings could narrow the valuation gap between EM and developed-market equities.
Rise of the Global South
Trade realignments are accelerating:
South–South trade is projected to grow 3.8% annually through 2033, outpacing trade among developed nations.
Leading players include India, Indonesia, Brazil, Mexico, and Saudi Arabia, each benefitting from expanding economic influence and strategic partnerships.
The EU is pursuing new trade deals with India and Indonesia, plus a modernised Mexico agreement, aiming to diversify supply chains and open fresh export channels.
China’s Mixed Picture
China remains divided between tech strength and domestic strains:
Tech Resilience: Strong performance in AI, cloud, and high-tech exports. EVs and critical minerals continue to gain global share despite rising US tariffs.
Domestic Pressure: The ongoing property downturn continues to weaken consumer confidence and cap the pace of economic recovery.
Capital Markets & Fixed Income Trends
Equity Flows
Global EM equity funds are seeing renewed inflows as investors rotate away from Europe and re-engage with developing markets.
Debt & Issuance
Middle East: GCC sovereign issuance is nearing $50B this year, supported by strong subordinated deals like Sharjah’s sukuk.
Central & Eastern Europe: High demand persists for CEE energy infrastructure debt; Slovenia’s NLB successfully tightened its latest AT1 issuance.
Local Currency Bonds: Rising local-currency sovereign issuance — coupled with strong domestic investor demand — is improving resilience across key EM economies.
4. Outlook & Risks
Macro Backdrop Remains Supportive
Easing global inflation and a potentially softer US dollar create a constructive environment for EM equities and debt.
Risks to Watch
Global Growth Slowdown: Especially if US tariffs intensify, pressuring global trade.
Climate & Geopolitical Shocks: Moody’s warns of “pockets of stress” across more vulnerable EM economies as severe weather events and volatile geopolitical developments persist.
Debt Fragility: While major EMs are more resilient, several frontier and smaller markets remain exposed due to short-term bank financing and elevated foreign-currency debt.
Looking Forward: What We Anticipate Next Week
Macro Data – Wednesday
🇦🇺 CPI YoY — 3.9% est | 3.5% prev
Rising inflation risks hawkish RBA commentary.
🇬🇧 Autumn Budget
Potentially high-volatility fiscal event for GBP and UK assets.
🇺🇸 GDP QoQ — 3.0% est | 3.8% prev
Growth decelerating → Fed bias shifts dovish.
🇺🇸 Core PCE YoY — 2.7% est | 2.8% prev
Lower PCE reinforces easing trajectory.
Macro Data – Friday
🇨🇦 Q3 GDP (Annualised) — 0.4% est | –1.6% prev
Return to growth supports CAD; shifts BoC expectations.
Earnings Lineup
Alibaba
Deere
Analog Devices
Dell Technologies
Autodesk
Workday
Zscaler
Zoom Communications
Kroger
Dollar Tree
ICYMI
UK Financial Reforms and Investment:
The Financial Conduct Authority (FCA) proposed a UK equity consolidated tape to boost competitiveness, capital investment, and liquidity in the UK equity markets by providing more straightforward access to market data.
The UK government announced billions of additional investment and new plans to boost UK businesses, jobs, and innovation, particularly in AI Growth Zones and sovereign AI infrastructure.
Investor Impact: The proposed consolidated tape could improve market efficiency and transparency, potentially making UK equities more attractive to international investors.
The significant government and private investment in AI, life sciences, and infrastructure signals emerging growth sectors that investors may target for future returns.
Corporate and Sector-Specific Highlights (In Case You Missed It):
Biotech/Pharma: A private equity-backed biopharmaceutical company, Anthos Therapeutics, announced a breakthrough in a new blood clot treatment that appeared safer than the current standard of care. This success led to the trial ending early and the FDA fast-tracking its review.
Minerals/Energy: Updates on solid-state battery programs (Ilika), advancements in energy exploration (Zephyr Energy), and fundraising for mining projects (Rome Resources, Oriole Resources) were reported.
Investor Impact: Biotech breakthroughs can lead to significant stock movements and are often a key focus for venture capital and specialised funds. Developments in clean energy and battery technology continue to reflect the transition towards decarbonization and offer long-term investment themes.
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Disclaimer
Please remember this is not investment advice—I'm simply sharing my personal opinions and research. Always conduct your own due diligence before making any investment decisions.