Investment Outlook Q2 2026
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Commodities - Technical Analysis
Gold and silver have broken their downtrends, triggering upward waves that still hold potential for further gains. After a strong retest, the oil price may settle into a range, but there are still opportunities for further gains. Natural gas prices did not reach a new low, but no pattern indicating a reversal has yet emerged. Copper is maintaining its upward trend; it must rise again within the next few days, or the rally could break down. Wheat and corn are also beginning to turn upward again from key support levels after strong retests.
Strong performance from Expedia
Despite the war in the Middle East and rising energy prices, U.S. consumer spending—and, by extension, travel DEMAND—proved to be sufficiently resilient in the second quarter, from which Expedia also benefited greatly. The company beat analysts’ expectations across all major metrics, with revenue growing by 14%, while also successfully maintaining its strategic goal of cost control, resulting in profit growth of over 20%. Cash generation is very strong, which is being used to repurchase shares, and for now, there's no sign of a slowdown on the demand side, leading the company to raise their full-year expectations for this year. Given the improving fundamentals, we are raising our fair value estimate to $365.
In the shadow of the Iran war, it's worth shifting investment exposures toward a more defensive stance.
Macro
The U.S. is more insulated from the Iran conflict than Europe and Asia due to relative energy independence, yet it remains exposed to oil-price shocks, supply-chain disruptions, and cost pressures. The GDP outlook has become more uncertain, inflation runs above target, with upside risks. The Iran war could trigger weaker growth in the Eurozone, but probably not a recession. In the base case, a 2022 crisis may be avoidable. The Fed might keep rates on hold for a while, while ECB could deliver also hikes this year. Due to inflation risks and the low term premium, we do not consider that longer USD and EUR bonds are attractive. EURHUF looks to be fairly priced with the current set of energy prices and could be attractive in a case of an energy price correction. The long end of the yield curve at around 7.5% looks to be attractive.
Equities
For the time being, the correction has not been sufficient to offset the risks associated with a negative outcome of the war (higher for longer energy prices), as equities are expensive, and the profit cycle is in its late stages. While maintaining a neutral exposure, we are shifting our regional and sectoral recommendations toward a more defensive stance. As a net energy exporter, the economy is less affected in the US, so it may outperform in the short term, but its high valuation poses a risk should long-term yields rise further. The situation in Iran is not as critical for Europe and CEE as the Russia-Ukraine conflict was in 2022, but it is having a more severe impact on growth and inflation than in the US, so we downgrade them to slight underweight and neutral. The strengthening dollar, rising interest rate expectations, and growth risks, could put an end to emerging markets’ recent outperformance. However, strong earnings momentum and improved valuations, providing cushion. We removed some cyclical, high beta exposures from our preferred sector list, like copper, uranium miners and European small caps, and added healthcare as a defensive play.
Bonds
As upside inflation risks have intensified, this could tie the hands of the Fed and the ECB when it comes to cutting interest rates in the coming quarters. In the short term, the likelihood of a stagflation-like outcome has increased, so it is advisable to shift toward a more cautious stance by overweighting cash-like exposures over longer-term bonds.
Commodities
We maintain our neutral view on commodities, as the longer-term outlook depends largely on the duration of the war in the Middle East and the extent of the damage it causes, which is difficult to assess for the time being. In a worst case scenario, prices could rise further, but a deescalation and/or demand destruction would lead to price falls from current elevated levels (especially oil and LNG prices).The upside and downside risks offset each other.
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