The US presidential election, geopolitical tensions, advancements in artificial intelligence, and the unwinding of Japanese carry trades are poised to significantly impact financial markets, underscoring the necessity for a diversified portfolio. As US growth moderates and European growth accelerates, the balance of economic risks is shifting, with core bonds expected to provide stability amid easing inflation. The broadening of US corporate earnings may lead to a regional rotation in equity markets, highlighting the importance of preparedness for ongoing volatility.
