He said expectations around geopolitical developments, including Iran–US relations, remain uncertain and markets are unlikely to respond meaningfully without concrete progress. He noted that “we are not close to a resolution,” adding that it is difficult for investors to depend on announcements without real evidence of change, and that markets will need “proof of direction” before reacting in a sustained manner.
On global equity trends, Orton highlighted that the AI-driven rally continues to dominate returns, but signs of rotation are gradually emerging across sectors and regions. He said that while AI has driven most of the performance so far, “now we are seeing some rotation,” with early signs of movement in Asian markets suggesting a broader shift. He added that investors should remain selective but may still “use downside opportunistically” in areas where earnings quality and structural growth remain intact, particularly in parts of technology and other growth-oriented sectors.
Regarding the technology sector, Orton described recent weakness as a healthy and orderly correction rather than a breakdown in trend. He said the recent selloff has “not been disorderly” and is better understood as a rotation, where semiconductors and AI-capex beneficiaries have come under pressure while more cyclical areas have gained traction. He expects capital to eventually return to areas with visible long-term growth, noting that “money will return to visible long-term growth sectors,” especially within technology, communication services, and industrials once broader clarity emerges.
On fixed income markets, Orton emphasized that rising long-term yields have become the dominant force shaping global risk sentiment. He said “long-term yields are driving markets” and warned that bonds are now behaving more like risk assets than traditional hedges. He also pointed out that the historical relationship between stocks and bonds is changing, with both asset classes increasingly moving in tandem. This, he said, has important implications for portfolio construction, requiring investors to diversify not just across asset classes but also within equities through sectors, industries, and geographies.
On monetary policy expectations, Orton pushed back against the idea of near-term rate cuts, arguing that inflation trends do not support easing at this stage. He said “rate cuts are largely off the table right now,” and added that current inflation data does not justify policy loosening. While acknowledging that markets often shift expectations quickly, he noted that central bank decisions remain a key uncertainty and described policy risk as a major wildcard for global markets going forward.Overall, Orton’s view suggests that global markets are moving away from a liquidity-driven, AI-led rally toward a more selective environment where earnings quality, sector diversification, and macro sensitivity to yields will play a much larger role in driving returns.
-1024x683.jpg "Strait Outta Hormuz: Getting the Iran Oil Story Straight")
