I got through a few research reports between client meetings this morning. Three stood out.
Goldman Sachs asks whether S&P 500 earnings are in bubble territory after a big run-up in profits driven partly by AI spending and chip margins. Its answer: growth is more likely to slow than collapse. As AI shifts from a capex story to a productivity story, the source of earnings growth will change. That distinction matters. Much of the market’s optimism is built on AI. Investors need to know which part of the story they are paying for.
S&P Global’s Daniel Yergin and his colleagues look at how the Middle East conflict is hitting global agriculture. It goes well beyond oil: fertilizer, diesel and biofuels are all affected. They also flag a sulfur supply bottleneck, which almost nobody is talking about, and warn that a strong El Niño could put further pressure on harvests in 2027. Wars do not stay in one sector. They never have.
Brookfield argues that higher interest rates are here to stay. The rate cuts everyone expected keep failing to show up. Investors will have to get used to a different world. That changes the maths on asset valuations and financing costs, and private markets will feel it most.
Three different subjects. AI earnings, food security and interest rates do not look connected at first glance. They are. All three point to an investment environment that is shifting under our feet. Well, markets rarely make life simple.