To The Moon

🎯 Core Takeaway: Stay Overweight Equities

Middle East volatility is just "short-term noise." History shows: missing the rebound hurts more than being caught in the dip 💔

📉 Key Stat: Over 30 years, missing just the 10 best trading days could cut your annualized returns roughly in half. And those best days? They usually come right after major drops.

Unless the global economy enters a sustained recession → "Stay invested" remains the best long-term strategy.

🏛️ Four Pillars at a Glance

🤖 AI: Not Just a Concept, But a Supply Chain Play

Anthropic's Mythos launch proves AI evolution is moving faster than expected ⚡

• 🔼 Upstream: Exploding demand for compute & storage (chips / cloud infrastructure)

• 🏢 Application Layer: Efficiency + security needs driving public & private sector spending

• 🛡️ Defensive Angle: Cybersecurity & software ecosystem — bet on companies enhanced by AI, not displaced by it

🗺️ Positioning: Long-term conviction on the US (R&D + IPO hub) and Asia Emerging Markets (supply chain + application落地)

⚡ 3 Actionable Takeaways for SG Investors

1. ⏰ Don't Try to Time the Market — Volatility is normal; waiting for the "perfect dip" usually means missing the rally

2. 🌏 Geographic Rebalance — Trim Europe, hold US, add Asia Emerging

3. 🤖 AI Is Not a Single-Stock Bet — Play the chain: chips → cloud → software / cybersecurity

💡 Citi in One Line: Technicals are improving, liquidity is supportive, and macro + fundamentals hold. AI adds complexity, but also creates a new batch of winners. This isn't the time to exit — it's the time to rotate. 🚀

Disclaimer: Summarized from Citi research for informational purposes only. Not investment advice. Invest wisely, stay sharp. 🐯

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Citi：Global Equity Markets Rally Strongly, AI Breakthroughs Accelerate

Volatility events such as Middle East conflicts prompt long-term investors to assess whether market conditions signal a sustained downward correction for equities. Historical experience suggests that if markets can avoid a sustained decline, missing rebound opportunities triggered by short-term pullbacks may damage long-term investment performance.

Despite the disruptive transformation brought by artificial intelligence and the evolving geopolitical landscape, our four investment pillars (macro environment, fundamentals, valuations, and aggregate capital flows) continue to indicate that the current market environment provides strong support for maintaining equity allocations.

New developments in artificial intelligence, such as Anthropic's launch of the Mythos1 model, further underscore the critical importance of AI investment for enhancing efficiency and ensuring security in both the public and private sectors.

Remain Overweight Equity Risk Assets as AI Opportunities Emerge

Periods of heightened market volatility often test investor discipline. Unless the global economy undergoes a sharp and sustained downward turn, we believe remaining invested is the core strategy for long-term investors. Historical evidence demonstrates that missing even a few of the market's strongest rebound days can significantly impair long-term returns. For example, over a 30-year horizon, missing the ten best trading days could reduce annualized equity returns by roughly half—and these best-performing days typically occur after significant declines. Therefore, the critical judgment is not whether markets will experience temporary adjustments, but whether the current macro environment signals a prolonged and sustained economic contraction. We do not recommend frequent "market timing" with long-term capital, but we prudently assess potential downside risks through a rigorous, data-driven analytical framework.

Our investment framework's four pillars begin with macro environment analysis. Recently released growth and inflation indicators continue to point to a robust nominal growth macro environment in the U.S., suggesting corporate profitability will rise accordingly. Outside the U.S., market performance divergence is becoming increasingly pronounced. European industrial production has shown signs of weakness, and high-frequency consumer confidence data has also declined, validating our earlier asset rotation strategy of reducing European equity exposure. In contrast, China's growth data and the broader emerging market trajectory remain resilient. Despite ongoing geopolitical tensions and the uncertain outlook for AI-driven disruptive transformation, the macro environment for global equities collectively continues to provide strong support for risk assets.

During periods of market stress, fundamentals remain the "anchor" that stabilizes investor confidence. From a long-term perspective, the ultimate direction of asset prices is driven by fundamentals. To trigger a sustained market correction, earnings expectations must be materially downgraded. Historical experience indicates that market declines of approximately 20% are typically accompanied by forward earnings expectation cuts of 10% or more. However, this pattern has not materialized in the recent geopolitical conflict-induced market volatility.

Earnings expectations across regions remain resilient, supported by the dual drivers of revenue expansion and margin improvement (see Figure 1). Even if analysts significantly downgrade the current 18% earnings growth forecast for global equities over the next 12 months, actual earnings growth would still be sufficient to support positive equity performance. Early indicators related to U.S. earnings growth, including macro variables such as Korean exports, all suggest that earnings growth will remain resilient in the near term. As the first-quarter earnings season kicks off, U.S. earnings growth momentum is poised to continue leading developed markets, thereby providing strong support for valuation levels in both U.S. domestic and global equities in the near term.

Figure 1: Global Fundamental Outlook Remains Resilient Despite Middle East Conflict

Source: FactSet as of April 17, 2026. Indices referenced using respective MSCI indices. All forecasts are expressions of opinion, subject to change without notice, and do not guarantee future events. Indices are unmanaged. Investors cannot invest directly in indices. They are for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any fees, expenses, or sales charges, which would reduce performance. Past performance is no guarantee of future results. Actual results may differ. NTM refers to next twelve months. EPS refers to earnings per share.

Technical factors, market sentiment, and liquidity collectively provide important support for fundamentals. At the end of March, equity market trading data indicated that markets had reached critical levels of large-scale "de-risking." However, within just 11 days, markets hit new all-time highs—the fastest rebound following an 8%+ drawdown since 1950—aided by the easing of Middle East conflicts. Meanwhile, the Fed's accommodative liquidity stance maintained through balance sheet management and open market operations continues to provide strong support for risk assets.

Against the current market backdrop, the ultimate form of artificial intelligence remains difficult to quantify. The widespread attention recently garnered by Anthropic's latest model, Mythos, demonstrates the continuous and rapid evolution of the AI field. This trend not only reinforces the critical strategic significance of AI spending in both the public and private sectors, but may also transmit upstream through the supply chain, driving massive demand for computing power and storage resources.

Over the long term, investors should actively position in core regions where R&D innovation is vibrant and IPO activity is robust, such as the U.S. and Asian emerging markets. Over the medium term, deep thematic investment in the AI industry chain also holds promise for attractive returns. Furthermore, given the growing importance of data security, we are evaluating opportunities in the cybersecurity and software ecosystem, aiming to identify quality enterprises that can synergize with AI in the artificial intelligence era rather than be displaced by it.

Conclusion: Technical indicators signal improving investor sentiment, and together with accommodative liquidity conditions, they reinforce macro and fundamental support. Although conditions may change dramatically at any time as markets return to all-time highs, seeking balance between fundamentals, macro environment signals, and investor sentiment remains our core investment philosophy. Moreover, the rapid evolution of AI models not only adds greater complexity to the investment landscape but also simultaneously breeds potential opportunities.