Global Opportunities
Portfolio

Global Market Summary — August 2026

North America: Headline indices staged a broad recovery from July's rotation, with the S&P 500 up approximately 2.5%, the Nasdaq 100 gaining around 3.8% and the Dow adding roughly 1.4%, led by energy and mega-cap technology while utilities lagged amid rising Treasury yields. Bond-market stress persisted at the long end: the US Treasury ran a buyback intervention for 10–30-year debt mid-month that offered only brief relief before yields resumed climbing. Fed Chair Kevin Warsh held rates at the Jackson Hole symposium alongside the BoE's Andrew Bailey and Bank of Canada's Tiff Macklem, with markets pricing close to even odds of a September move. Renewed US–Iran strikes into month-end lifted oil and unsettled sentiment, though the major averages still closed out August with gains.

AI Infrastructure: Nvidia's 26 August result partially reversed July's de-rating without resolving its underlying tension. The company reported a beat against its own guidance, a backlog above US$2 trillion, and guided top-five hyperscaler capex to US$1.3 trillion in 2027, up from roughly US$800 billion in 2026, alongside an expanded AWS partnership covering two million additional GPUs. The print reaffirmed demand durability even as scrutiny of financing structures and the gap between capex and monetisation continued. Separately, President Trump's 26 August emergency order on the bulk power system and foreign-made grid equipment added a domestic-policy dimension to the grid and transformer buildout, reinforcing the North American push toward onshore grid-equipment capacity.

Europe/UK: The STOXX Europe 600 gained a modest 0.29% in August, a headline that concealed a wide internal split: the DAX was substantially stronger while France and the UK lagged. Month-end trading turned risk-off as the renewed US–Iran strikes lifted Brent crude above US$90 a barrel and reinforced ECB rate-hike pricing following a rise in German front-end yields. German CPI accelerated to 2.9%, driven by a 10.5% year-on-year rise in energy prices even as core inflation held at 2.4%. Siemens Energy's results beat forecasts, with data centres and the Middle East together representing roughly half of gas-turbine orders, while Aggreko's data-centre revenue nearly doubled — both concrete evidence that AI-driven power demand is converting into order books today.

Asia-Pacific/Japan: Regional markets consolidated after July's sharp reversal rather than extending it. The Nikkei and Kospi remained volatile around Fed policy and Treasury-yield swings — both dipped in mid-August as US–Iran talks stalled and yields resumed their climb, before partially recovering into month-end. Hong Kong's Hang Seng and mainland Chinese indices were comparatively steady, helped by a 6 August polysilicon "anti-involution" pact among Chinese producers aimed at curbing destructive price competition in solar-grade polysilicon — a supply-discipline measure directly relevant to the renewable-equipment supply chain. Australia's ASX 200 continued its incremental grind higher, extending its recent run of resilience.

Macro and currency: Global long-end bond yields stayed elevated across the US 30-year, UK gilts and Japanese JGBs through August, a persistent theme from July that the mid-month Treasury buyback only briefly interrupted. AUD/USD strengthened by roughly 2% over the month, which meant AUD-translated returns on USD-denominated exposures lagged their local-currency equivalents — visible directly in the portfolio's own August return gap between AUD (+1.6%) and USD (+3.6%).

Global read: August partially reversed July's AI-infrastructure de-rating without resolving the underlying tension between record hyperscaler capex commitments and the pace of monetisation. Nvidia's results and its US$1.3 trillion 2027 capex guide reaffirmed the demand side of the Nexus thesis, while bond-market stress, a still-hawkish Fed and a late-month geopolitical flare-up kept volatility and long-duration discount-rate risk elevated heading into September. Cross-regional developments — the US grid-equipment emergency order, China's polysilicon discipline pact and Europe's continuing power-scarcity-driven data-centre siting — all point to the same conclusion as July: the AI-power/energy-transition dispersion trade remains more about who captures the economics of the buildout than about the buildout itself.