London Fog | RBC's Markets in Motion

Nuggets

London Fog | RBC's Markets in Motion · Nuggets

The AI Overweight Consensus: Global institutional investors broadly agreed that technology sectors generally, and artificial intelligence specifically, represent the primary bright spots in the global corporate earnings backdrop.
Data Verification: RBC presented data charts demonstrating how the Technology, Energy, and Materials sectors are actively driving upward revisions for 2026 consensus S&P 500 EPS growth forecasts. Furthermore, a chart illustrating expanding EPS growth leadership among dedicated AI companies in 2026—outpacing the traditional Magnificent 7 (MAG 7) and the broader S&P 500 index—was highly well-received by clients who noted their existing exposure had driven strong portfolio performance.
The Diversification Hurdle: Despite strong performance, investors expressed a clear desire to identify alternative, non-tech equity allocations to diversify risk. However, finding viable options with similar fundamental strength remains difficult:
- Energy: Generated the highest level of European investor interest seen in a long time. RBC reiterated that valuations within the S&P 500 Energy sector remain fundamentally attractive.
- Financials: Garnered stable discussion interest; RBC presented a chart showing that Capital Markets sub-sector valuations reached extreme highs last year but have successfully corrected and normalized to more reasonable entry points.
- Defensives (Staples vs. Discretionary & Industrials): Consumer Staples generated interest because its fundamental problems are widely understood and its valuation is heavily discounted. This contrasts sharply with Consumer Discretionary (known headwinds but expensive multiples) and Industrials (companies emphasize operational resilience, but the sector looks expensive).
- Healthcare: Investors shared mutual frustration with RBC regarding the sector's persistent weakness in corporate earnings revisions and negative institutional fund flows.
- Utilities: RBC warned that the Utilities sector could face localized affordability headwinds stemming from political debates ahead of the US midterm elections.

London Fog | RBC's Markets in Motion

00:00:03 | Episode Introduction & Speaker Details

References

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London Fog | RBC's Markets in Motion

00:00:03 | Episode Introduction & Speaker Details

References

More nuggets

Market Strategy Weekly – July 17, 2026 | Baird

Robert Kaplan Exclusive | India's Growing Economic Potential Amid Global Challenges

BofA: The Consumer’s Summer Spending Surge | 15 Jul 2026

Must Read Research: SpaceX; The Next AI Winners; Europe’s Earnings Momentum; Buy Value | 14 Jul 2026

00:01:32 | European Investor Sentiment & Geopolitical Dynamics

00:02:29 | Sector Rotation Dynamics & The "AI Alternative" Dilemma

00:04:04 | Factor Performance: High vs. Low Price Momentum

00:04:36 | Earnings Revision Trends & Global Market Multiples