Note: the ROOF highlights will be on leave after this week, returning in January. Insights from last week's changes in investor sentiment: Investor sentiment closed last week on a downbeat note: bearish in seven of the markets we track (see table), negative in two — Australia and the UK — and neutral in just one, China. This gloomy outlook stands in stark contrast to the continued rally in equities, fueled by hopes of persistently lower U.S. interest rates, aggressive AI-driven growth (with little regard for debt), and the ongoing pause in the U.S.–China trade war. Behind the optimism, investors sense trouble ahead: potential military conflicts at home (cities) and abroad (Venezuela), questions over Fed independence, inflation risks, and a looming AI bubble. And yes — winter is coming. 202

Insights from last week's changes in investor sentiment: Investor sentiment continued to deteriorate last week, ending bearish across all five regional markets we track. Among individual markets, U.S. investors oscillated in and out of bearishness. In the U.K., sentiment dropped sharply from neutral to strongly negative ahead of this week’s Autumn Budget report. Japan shifted from neutral to negative as investors assessed the potential economic fallout from the new Prime Minister’s diplomatic clash with China. In China, sentiment weakened further on disappointing FDI data, closing on the cusp between negative and bearish. Overall, the imbalance between risk demand and supply is now deeply negative across most major markets, leaving them highly vulnerable to sharp downside overreactions if

Insights from last week's changes in investor sentiment: Investor sentiment continued to weaken last week, ending bearish in five of the ten markets we track: Asia ex-Japan, Global Developed, Global Developed ex-US, Global Emerging, and Europe. Sentiment in the US was negative, while investors in other markets were neutral. Sentiment in Australia and the UK slipped from positive to neutral, whereas in China and Japan it recovered from the previous week’s negative stance. Despite this growing pessimism, market returns remained positive, defying the trend in sentiment. The imbalance between the demand and supply for risk is now as strongly negative as it was before Liberation Day. In this environment, investors’ negative bias tends to make them overreact to bad news and underreact to good ne

Insights from last week's changes in investor sentiment: Investor sentiment continued to deteriorate over the past two weeks, even as markets moved higher. Sentiment ended bearish in Asia ex-Japan, Europe, Global Developed ex-US, and Global Emerging Markets. Investors remained negative in China, Global Developed markets, and the US. Only Australia and the UK maintained positive sentiment — though both have been prone to sharp mood swings recently. Globally, the disconnect between investor sentiment and market performance is widening, reaching unsustainable levels in several markets where the imbalance between the demand and supply for risk has turned dangerously negative. The past two weeks were dominated by Trump news, both domestically and internationally, and he looks set to continue sh

Insights from last week's changes in investor sentiment: Investor sentiment kept drifting away from market performance last week. Fear of renewed US-China trade tensions weighed on sentiment, while markets shrugged off geopolitics and surged ahead on strong economic data and corporate earnings. By Friday, sentiment was negative in six markets (Asia ex-Japan, China, Global EM, Europe, Japan, US), neutral in three (Global DM, Global DM ex-US, UK), and positive only in Australia—boosted by rising gold prices and warmer US ties. Weekend headlines brought relief: progress on US-China trade talks, Milei’s strong local election showing (securing a US lifeline), and neutral US inflation data. Together, these should spark a sentiment rebound this week, reinforcing market momentum. Since Trump’s ret

Insights from last week's changes in investor sentiment: Investor sentiment weakened further last week, turning negative in four major markets—China, Europe, Japan, and the US—while remaining neutral elsewhere. Although the initial shock of the Liberation Day tariffs and related trade war concerns has eased, these issues continue to weigh heavily on investors’ minds. Some countries, including Japan, Canada, the UK, and the EU, have complied with the Trump administration’s demands by offering non-reciprocal trade terms. Others, such as India, China, and Brazil, have resisted, adding complexity to the global trade landscape. With no cohesive global trade framework currently in place, forecasting has become more difficult, and this lack of confidence is dampening investors’ appetite for risk.

Insights from last week's changes in investor sentiment: Investor sentiment closed the week in a holding pattern—dead neutral across all markets we track, except Japan where investors turned negative after the political fallout between the LDP and Komeito parties. It is as if investors globally are saying “We don’t know what’s going on between you two (US and China), but we don’t like it one bit”. Except in Japan where they seem to be saying “We don’t know either, but we have our own leadership vacuum to deal with”. Right now, the market shows a perfect balance between the supply and demand for risk—there’s no sign of a sentiment-driven risk premium anywhere, except in Japan, where risk aversion is climbing rapidly. This week, ‘tariffied’ investors will be watching closely for any sign tha

Insights from last week's changes in investor sentiment: Investor sentiment continued to rebound last week, largely thanks to a steady decline in risk aversion—except in the UK. There, investors had shown a genuine appetite for risk in September but dialed back their enthusiasm somewhat last week. Globally, investors are less negative, but still not confident enough to shift beyond a neutral stance. Only those in the US, UK, and Global Developed markets managed to edge into slightly positive territory. In Japan, investors remained neutral in a wait-and-see mode ahead of the weekend’s LDP leadership election, which saw (on her third attempt) the election of Takaichi, the party’s first female leader and a known follower of Abenomics. That outcome should give sentiment a lift this week. Meanw

Insights from last week's changes in investor sentiment: Resilient market returns have sparked a sentiment recovery in six of the markets we track — China, Global Developed, Europe, Japan, the UK, and the US — narrowing the gap between market performance and investor sentiment that had widened since early August. In contrast, sentiment remains out of sync with market performance in four other regions: Asia ex-Japan, Australia, Global Developed ex-US, and Global Emerging Markets. Notably, except for the UK, the sentiment rebound was driven more by a decline in risk aversion than by an increase in risk tolerance. This means investors in those markets feel less urgency to protect against downside risk, but that sense of security hasn’t yet translated into a greater willingness to take on risk

Insights from last week's changes in investor sentiment: Investor sentiment remained range-bound last week, fluctuating between mildly positive and mildly negative as investors struggled to make sense of conflicting economic signals. The ongoing gap between market performance and sentiment persisted in most regions, narrowing only in the US, UK, and other developed markets. A lack of transparency, consistency, and clarity about the fundamental economic outlook is translating into a lack of confidence, direction, and consensus among global investors. This uncertainty is likely to persist in the near term, especially as the leading effects of tariffs begin to show up in lagging economic data in Q4. Markets and sentiment have been locked in a cat-and-mouse game for weeks, with no clear end in

Insights from last week's changes in investor sentiment: Investors remained hesitant to fully embrace last week’s market rallies, with sentiment ending neutral in five markets and negative in four. Only in Global Emerging Markets did investors show genuine bullishness. Despite lingering doubts about both macroeconomic and geopolitical conditions, the recent divergence between rising market returns and falling sentiment narrowed in four of the markets we track—namely the UK, Japan, Global Developed Markets, and the US. It’s as if the bears investors feared were circling the markets have wandered off, distracted by other concerns. Now, investors are sniffing the air for any lingering trace of bearishness—and finding none. It’s as though the Fed’s expected rate cut has scrubbed their scent cl

Insights from last week's changes in investor sentiment: Investor sentiment rebounded slightly last week, ending a month-long decline, as renewed hopes for lower U.S. interest rates lifted most markets. However, sentiment in European and Global Developed ex-U.S. markets remained unchanged, reflecting their heightened sensitivity to tariff negotiations rather than monetary policy—especially now that the ECB is widely believed to have concluded its rate-cutting cycle. Japanese investors stayed bearish, though slightly less so than the previous week, as leading indicators continue to signal a slowing economy. Sentiment in Global Emerging Markets returned to bullish territory, driven more by a decline in risk aversion than by increased speculative appetite. Across all markets, the balance betw

Investor sentiment continued to weaken last week across all markets we monitor. Only Global Developed ex-US, Asia ex-Japan, and US investors maintained a neutral stance. The positive sentiment risk premium observed in July has now been fully eroded in August, with Japan showing signs of a negative sentiment risk premium. With the earnings season behind us, investor sentiment is now being shaped by macroeconomic and geopolitical factors. Factual analysis is giving way to counterfactual speculation. While there is greater clarity around the trajectory of US interest rates, it is being overshadowed by growing uncertainty around global trade, economic growth, and the deepening decoupling between the world’s two largest economies. As the global landscape shifts toward a multipolar order, emergi

Insights from last week's changes in investor sentiment: Over the past two weeks, investor sentiment has dropped sharply across almost every market we track, with only Global Emerging Markets managing to maintain a positive sentiment risk premium. Ongoing uncertainties—such as stalled peace talks in Ukraine, escalating tensions in the US-China chip dispute, and mounting concerns about the independence of the Federal Reserve—have made investors increasingly wary. Despite this, Powell’s uncharacteristically direct remarks on Friday regarding the likely outcome of the upcoming FOMC meeting sparked a widespread rally in US markets, driving them to record highs. Unless the upcoming PCE data delivers a negative surprise, the recent optimism about potential rate cuts could fuel a rebound in senti

Note: The ROOF Highlights will be taking a break until Monday August 25th. Insights from last week's changes in investor sentiment: Investor sentiment remained bullish in seven of the ten markets we track but ended the week off its peak as markets absorbed a one-two punch: a mini “Liberation Day” and a dismal U.S. jobs report, capped off by a presidential tantrum. In China, bullish sentiment began to fray as the Politburo meeting wrapped with no mention of expanding current stimulus measures - nor any hint of new ones - leaving investors disappointed and markets adrift. Europe and Japan managed to sidestep steeper tariffs by striking deals with the Trump administration, keeping sentiment neutral. But after the dealmaking comes the hangover, and investors are now left to parse the fine prin

Insights from last week's changes in investor sentiment: Investor sentiment remained strong last week, buoyed by news of the US-Japan trade deal. Seven of ten markets ended bullish, though sentiment in Japan stayed neutral due to political uncertainty after the LDP's election loss put Ishida’s leadership in question. European sentiment also remained neutral ahead of the US deal deadline, but Sunday's framework agreement may encourage more risk-taking among those investors this week. As of Friday’s close, there is a strong positive sentiment risk premium in five markets: Asia ex-Japan, China, Global Developed markets, Global Emerging markets, and the US. The other five markets all showed a more balanced supply-and-demand for risk (i.e. more demand than supply but not enough to trigger a pos

Insights from last week's changes in investor sentiment: Investor sentiment remains resiliently bullish despite looming tariff deadlines, with a notable positive sentiment risk premium observed in six of the ten markets we track—namely Asia ex-Japan, China, Global Developed Markets, Global Emerging Markets, the UK, and the US. Sentiment also held positive in Australia, Europe, and Global Developed ex-US markets. In contrast, sentiment in Japan was mixed, influenced by the lack of a trade agreement with the US and anticipation surrounding a key Upper House election this weekend, which could result in a populist shift disrupting the political status quo. Overall, except in Japan, investor sentiment continues to support the current market rallies across global markets. The Trump administratio

Insights from last week's changes in investor sentiment: Investor sentiment ended the week on a bullish note in eight out of the ten markets we monitor. The two exceptions were Europe, where sentiment was positive but not quite bullish as investors await news of a trade deal with the US before the August 1st deadline, and Japan, where sentiment remains negative following two failed attempts at securing a trade deal with the Trump administration and in anticipation of a contested Upper House election on July 20th. In the other eight markets, investors seem confident that trade deals will be finalized over the summer, avoiding tariffs and allowing the Fed to resume interest rate cuts in the fall. This positive bias suggests that during this earnings reporting season, investors are likely to

Insights from last week's changes in investor sentiment: Investor sentiment experienced a slight dip from its predominantly bullish highs last week, as the July 9 deadlines for trade deals with the Trump administration approached. By the end of the week, investors remained just positive in Australia, Global Developed, and Global Developed ex-US markets, compared to the previous week's bullish stance. In Japan, sentiment shifted from neutral to negative due to unsuccessful trade negotiations with the Trump administration. Similarly, sentiment in Europe weakened slightly amid ongoing negotiations. The UK was the exception, where investors stayed bullish following the signing of a trade deal. Sentiment remained bullish in China ahead of the Politburo meeting which investors hope will result i

Insights from last week's changes in investor sentiment: Investor sentiment continued its upward trend, closing the week on a bullish note in eight out of the ten markets we monitor. This marks an improvement from the previous week, with sentiment in two additional markets (Global Developed Markets and the US) turning bullish. European investors, while becoming increasingly positive, did not quite make the bullish list. The only exception was Japanese investors, who remained neutral despite a rising market. Demand for risk now strongly outweighs supply, which should temper any reaction to negative news surrounding the upcoming tariff deadline on July 9. NATO Summit: Trump, fresh from his TikTok fight with Iran, attended a NATO summit that was clearly designed to praise, appease, and entert