US meteorologists see a probability above 90% that the current El Niño becomes very strong, and 69% that it becomes historic. These events bring extreme weather across the globe, potentially disrupting a range of agricultural and industrial commodities and feeding through to inflation.
The risk could be compounded by the collapse in transits through the Strait of Hormuz, which is already disrupting critical production inputs. In such an environment, we believe enhancing portfolio diversification is key, particularly through alternative investments.
Last year, AI companies were funding data centers, chips and power through existing cash flow. Today they are raising new capital through equity and debt, with bond issuance potentially exceeding $350 billion in the US investment-grade market this year.
AI exposure now extends into public and private credit, and pressure is starting to show on individual names, with Oracle's spreads reaching 215 bps. Investors should therefore remain selective and mindful of concentration, as there may be fewer places to hide.
The new Fed Chair, Kevin Warsh, brings unconventional views on inflation measurement and has expressed a preference for trimmed measures, at a time when inflation has remained above target for five years.
In the current environment, the Dallas Trimmed PCE exhibits a downward bias following a succession of supply-side shocks since 2020 and was also slow to capture the 2021 inflation surge. A shift in the Fed's preferred inflation gauge could therefore raise credibility concerns.
Fitch Ratings has affirmed Banque de Commerce et de Placements SA's (BCP) Long-Term Issuer Default Rating (IDR) at 'BBB-' with a Stable Outlook. It has also affirmed BCP's Viability Rating (VR) at 'bbb-'.
Copper is no longer just a traditional metal. It has become a strategic resource for the next generation of technologies.
The recent surge in copper prices reflects complex dynamics that are both extraordinary and structural: supply and demand pressures from the Middle East conflict, operational constraints in major producing countries and accelerating demand driven by AI and electrification as a whole.
