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In our latest CIO Viewpoint on equities, we comment on the latest equity market developments and explain why we like the idea of a "Barbell" approach that combines Mega Tech stocks with European Small Caps. Moreover, we provide a short Q2 2024 earnings season preview.

Key takeaways:

  • Equities remain the most convenient way to capitalise on AI-driven technological progress. Mega Cap Tech valuations are not yet historically at bubble levels.
  • European Small Caps may now start to perform better. A “Barbell” approach, combining them with Mega Cap Tech stocks, would have various merits.
  • The U.S. Q2 earnings season kicks off next week. S&P 500 Q2 earnings expectations have risen since the beginning of April, but with marked sectoral divergence.

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The CIO Viewpoint below is available to download. Please refer to the Important Information at the end of the memo for disclosures and risk warnings.

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