AUGUST 2026
The volatility of the gold price has surged since the outbreak of the Iran war.
This has stemmed from an approx. 25% price decline in bullion from its all-time high around U$5,300/oz that was registered in the first quarter.
Historically, the gold price has seldom drawn down by more than 30% peak-to-trough, suggesting this pullback should be nearing an end.
For bullion to resume its upward trend, a clear catalyst is needed.
This could include an economic slowdown, more political uncertainty or renewed concerns over the servicing of extreme government debt levels.
The latter seems likely given the recent rise in bond yields.
Healthcare stocks have performed well of late, buoyed by solid earnings, encouraging regulatory news and major research breakthroughs.
An extraordinary sequence of clinical milestones prompted many from the scientific community to label May a “miracle month” for medical innovation.
The multi-year underperformance of healthcare stocks has depressed the sector’s weight in major equity indices.
And as the chart below shows, healthcare valuations relative to the general stock market have fallen to multi-year lows.
But with general corporate earnings now facing tough year-on-year comparisons, the strong revenue momentum of healthcare stocks should stand out.
Which suggests this nascent sector rotation into healthcare may have further to run.
Indian stocks have stabilised after a bruising first quarter and are proving resilient to both the Iran war and the “AI-takes-all” market environment.
Though cyclical headwinds remain there are growing signs that the record foreign selling of Indian equities is over with U$2bn of net inflows being recorded in June.
Global equity markets have rapidly concentrated into a group of “AI winners,” benefiting many of India’s emerging market peers this year.
Taiwan and Korea now comprise over 50% of the MSCI Emerging Market equity index and three companies account for over 30% of its weight.
If the AI trade ever reverses, “AI laggard” is a moniker the Indian market may be happy to own.
Catastrophe (Cat) bonds are insurance-linked securities that pay investors an attractive coupon in return for accepting the risk of losing some, or all, of their principal if a specified natural disaster (such as a hurricane or earthquake) occurs.
The Atlantic hurricane season is typically the dominant risk for the asset class.
Peak hurricane season occurs between August and October each year. The 2026 Atlantic hurricane season forecasts are for a below average season, with 5 hurricanes and 2 major hurricanes currently anticipated.
This is below the 10-year norm of 8 hurricanes and 4 major hurricanes per season.
Atlantic sea surface temperatures are running below last year’s levels and it looks increasingly likely that strong El Nino conditions will emerge to hinder the formation and intensification of Atlantic hurricanes.
Should this optimistic outlook come to pass, Cat bonds could continue to offer a steady and diversified return stream as we head towards year-end.
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This communication is provided for information purposes only. Bentley Reid believes that, at the time of publication, the views expressed herein represent fair opinion; however, no assurance can be given that any illustrated or referenced performance will be achieved or repeated. All data and graphical information are believed to be accurate at the time of capture but may be subject to change and may not reflect current conditions. Fluctuations in exchange rates may cause the value of investments to rise or fall.
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