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While GALD shares have performed well since the company’s IPO, the stock remains in a "discovery phase", in which its valuation appears expensive amid consensus estimates that do not fully appreciate the underlying fundamental opportunity. Over 50% of cash flows are derived from Botox and dermal fillers, positioning GALD in a duopoly market with a wider moat and longer growth runway than traditional beauty peers. GALD's core skincare business is growing ~10% annually (relative to L’Oreal’s sub-5% revenue growth), driven by exposure to higher value, nascent life cycle segments. The investment case is further supported by the company’s new eczema treatment, Nemluvio, which could generate $5bn+ in sales vs. management’s $2bn guidance. TP CHF230 (60% upside).
FAN stands out as a high quality (29% FY24 FCF RoE) mid-cap building products and business services company that has bucked the trend of sluggishness across its core markets. The business has had a very successful buy-and-build strategy, using excess FCF and modest leverage to undertake earnings accretive M&A. The recent acquisition of Fantech exemplifies this and Fighting Financials thinks consensus estimates underestimate the full benefits of this deal. Beyond fundamentals, FAN also fits the profile of UK SMID-caps attracting takeover interest with 1) geographically diversified revenues; 2) high returns on capital; 3) modest leverage; and 4) suffering a discount due to trading on the troubled UK market.
SAP completes the acquisition of SmartRecruiters, strengthening its position in AI-powered talent acquisition, competing with Oracle and Workday; the deal enhances SAP SuccessFactors with advanced recruitment automation and candidate experience tools. However, GR20 believes what is ultimately at stake for SAP is the relevance of its AI infrastructure - ensuring it is well-positioned to benefit from the rise of AI agents in enterprise environments. They anticipate that it will take a few more quarters before SAP and its peers are able to monetise AI at scale. This will depend on customers accelerating the consolidation of their data into unified semantic models.
At its upcoming CMD, TKH is expected to set new mid-term targets to 2029: turnover >€2bn, EBITA margin >18%, ROCE 22-25% and net debt to EBITDA / leverage ratio <2x. While broadly consistent with prior goals, the updated plan is likely to emphasise organic growth. Crucially, with its investment cycle complete and working capital set to normalise, TKH is forecast to generate €600-650m in FCF in the next couple of years. This underpins scope for materially larger share buybacks - potentially €300m, or ~20% of current m/cap - alongside dividends and bolt-on M&A. the IDEA!’s DCF points to fair value of €51.30/share, implying ~50% upside.
FTSE 100 Technical Review
Messels’ weekly Stocks & Sectors report highlights renewed strength in Aerospace and Banks, with selective improvement in Miners and long-term support levels being monitored for Media stocks. New Buys include Sainsbury's (breaking out of a two-year range and gains relative momentum) and HSBC (breaking out of a short-term range and renews outperformance). Entain, a Buy last week, is finding support above prior price and relative bases. Messels also closes their long position in Ashtead as it reaches potential price and relative resistance following a strong rally since Apr. Other notable moves include: Babcock renews price and relative uptrends; Fresnillo has broken resistance and made one-year price and relative highs; while RELX approaches long-term support. Messels’ FTSE 100 Momentum portfolio currently consists of 19 stocks.
North America
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Outside of AI, why invest in the US?
US equities remain the world’s most important market, but passive benchmarks are distorted by AI concentration risk. Durable alpha lies in structural themes beyond AI. Power infrastructure (Constellation, Duke, NextEra) will benefit from grid bottlenecks as data centres drive demand. Re-industrialisation (Caterpillar, Honeywell, Rockwell) reflects reshoring and automation. The energy transition (Dominion, Enphase, ExxonMobil) requires trillions in capex. Housing scarcity (D.R. Horton, Home Depot, Lennar) is a structural imbalance. Healthcare innovation (Abbott, Eli Lilly, UnitedHealth) rides longevity and med-tech advances. Cybersecurity (Cisco, CrowdStrike, Palo Alto) is non-discretionary. Generational wealth transfer (BlackRock, Morgan Stanley, Schwab) reshapes capital flows. The AI productivity super-cycle is real, but thematic allocations across these shifts offer broader, smarter US exposure.
NBIS announced its first hyperscaler contract - a 5-year deal with Microsoft worth up to $19.4bn, which will consume nearly the entire capacity of its New Jersey facility. The agreement marks a major validation of NBIS’s model, significantly de-risking its capacity buildout plans as it targets 1GW across the US in the coming years. Hamed Khorsand thinks the deal provides unprecedented clarity on the company's long-term revenue potential and opens the door to further hyperscaler partnerships. Following the news, the shares surged ~50% and are now up 170% since he turned bullish in Jan 25, however, Hamed continues to see significant upside raising his TP from $90 to $130.
Brian McGough’s deep-dive store analysis suggests new unit productivity is deteriorating across OLLI’s 650-store base, signalling market saturation and making aggressive expansion value-destructive. While he doesn't doubt the group can get to 1,000 stores as it expands to the West Coast, it will likely have to pay egregious rents inherent to the region which destroys the company’s value proposition if it intends to maintain four-wall economics and will have to build expensive DC capacity to help it scale. At a minimum, OLLI can't add many more stores without materially eroding its margin and return structure. A 10x EBITDA multiple can't handle that - never mind 21x. Brian’s estimates are materially below consensus over a TAIL duration, leading to what could/should be ~50% downside in the stock.
Healthcare alpha generation
Channel Dynamics has built a strong record of HC alpha generation by leveraging deep channel checks with private company experts and providers. Over the past 12+ months, their calls have consistently delivered meaningful relative alpha from report release through earnings, ahead of major stock moves including: UnitedHealth (flagged negative MLR inflection and UNH exposure before disappointing earnings and stock collapse); DexCom (called negative inflection in DME performance before turning back positive on DME relationship improvements and G7 market share gains); Align (correctly predicted Q/Q shifts in clear aligner and capital equipment purchasing trends); Penumbra (called positive DVT market growth trends and PEN market share gains in DVT, PE and Neuro Segments); and Dentsply Sirona (flagged worsening product/vendor performance and further deterioration from tariff impacts).
Compounding at the curb
The waste sector has proven to be one of the most durable compounders in the industrials sector. Essential services support stable cash flow across the cycle, reinforced by pricing discipline and steady volumes. Growth is amplified through ongoing consolidation and optionality in RNG and EPR. Within this backdrop, Veritas sees diverging investment cases for Waste Connections and GFL. WCN, with modest leverage, FCF conversion returning to 50% post-RNG build and balanced capital returns, offers steady compounding. Attractive end-market exposure and visibility to double-digit FCF growth support a premium valuation and Veritas’ Buy rating. By contrast, GFL has ~70% more FCF growth priced in than peers, while longer-term margin and FCF convergence remain uncertain, particularly vs. a structurally advantaged peer like WCN. Accounting adjustments add complexity and LFL comparisons highlight its shortfall vs. larger peers.
FLY was highlighted at Revelare’s Space Industry Investor Idea event - while still relatively unknown post-IPO, its current multiple prices in significant execution risk. Of its $1bn 2027 revenue target, ~$770m is backlogged and as launch cadence accelerates, EBITDA margins are expected to expand sharply to 30-40%. A diversified backlog, milestone-based contracts and a major Northrop Grumman deal further strengthen credibility. The presenter believes a $10bn valuation is reasonable as a starting point (vs. the current $6bn m/cap) and expects a positive earnings report in Nov as well as another launch coming this fall. Once long-onlys see 2-3 quarters of execution, investors will enter the stock in a much more material way.
Tower REITs sell-off overdone
Kolytics’ latest Towers sector research, “Poor Signal…!”, analyses the market reaction to EchoStar’s $40bn sale of 5G spectrum to AT&T and SpaceX. While Tower REITs sold off sharply, Kolytics argues this response is misplaced. EchoStar lacked the capital to execute its Direct-to-Device strategy, but AT&T’s spectrum purchase should drive incremental tower investment to improve its lagging mid-band 5G coverage and SpaceX’s spectrum use is complementary, not competitive, to terrestrial networks. Importantly, Tower REITs’ direct exposure to EchoStar revenues is capped at just 2-5% under long-term leases. With data demand still growing at 15-20% p.a., Kolytics sees the sector’s fundamentals as intact - and the sell-off as a market overreaction.
Victor Galliano sees the disparity in valuation between AFRM and Klarna as more of a downside risk for AFRM than an upside opportunity for KLAR; the intense competition in the BNPL marketplace is a potential “banana skin” for its premium growth expectations and he believes that AFRM should lose some of its “scarcity value” as a near pure play on BNPL in view of KLAR’s listing. With regards to Victor’s recommendations on payments companies in general, he maintains Buy ratings on PagSeguro, Nexi and PayPal for their value credentials primarily and upgrades KakaoPay from Sell to Neutral, following its marked de-rating.
OWS reiterates its short on STX with a $45 price target (80% downside), citing QLC flash displacing HDDs in data centres as the main catalyst for FY26 revenue and earnings misses. Despite in-line 2Q25 results and a muted 3Q25 outlook, the shares have risen >40% in 6 weeks. Bullish claims of sustainable HDD demand from AI are overstated, with consensus revenue forecasts largely unchanged and Y/Y pricing for mass capacity HDD’s trending downwards. Industry contacts confirm QLC NAND is steadily eroding HDD workloads, a shift that should accelerate with 3D NAND advances. Valuation has surged to unprecedented levels, insiders are selling and OWS sees optimism collapsing as cyclicality returns.
TWLO is positioned as a leader in the expanding CXaaS market, fuelled by its unique integration of communications, data and AI capabilities, which no competitor matches. The company’s disciplined shift to a unified platform is unlocking deep cross-sell opportunities among its vast customer base (63% of 349k+ customers still use only one product) and driving margin expansion, while accelerating revenue growth and robust FCF ($3bn+ cumulative by 2027) support an explicit capital return strategy (50% payout target via buybacks). Anchored by strong partnerships in the AI ecosystem and a proven go-to-market overhaul, TWLO’s compelling risk/reward profile is underpinned by durable profitability targets and margin stability, making it highly attractive for those seeking exposure to next-generation customer engagement infrastructure. TP $140 (35% upside).
Japan
Kyocera is attracting investor attention, fuelled by hopes of unlocking value from its overcapitalised balance sheet and complex business structure, rather than faith in management. While the first steps on asset divestment and business restructuring have now been decided, Asymmetric Advisors suspects the external pressure from activist investors, backed by TSE reforms, will force a more rapid pace of change than the “not so drastic” change management are presently outlining. Trading at 0.88x PBR with ¥1.6trn net cash, recent announcements - a ¥200bn buyback and partial KDDI stake sale worth ~¥250bn - highlight the scale of latent value.
Emerging Markets
Overlooked opportunities in YWR’s QARV rankings
Why do China, shipping, iron ore, hardware, Brazil… all stand out if you screen high ROE’s with low valuation? Erik@YWR sees it as scepticism about global growth on which he is taking a contrarian view. Following this month’s review of YWR’s QARV rankings key themes include: 1) A massive China bull market has only just begun. 2) Opportunities in iron ore, where Fortescue, Rio Tinto and Kumba are delivering ~20% ROEs at <12x P/E despite China’s property crash. 3) The Taiwanese semiconductor supply chain stands out as highly profitable and undervalued. Everyone focuses on Nvidia and the datacentre buildout but misses the whole Taiwanese supply chain behind this. Tokyo Electron and ASML also screen well. 4) Brazil is overlooked, with names like Itau, Vale, Ambev and B3 all screening well. 5) Container shipping - supply-chain diversification could sustain tighter freight rates than investors expect.
Arete upgrades the stock to Buy from Sell based on their outlook for chip business growth and AI Cloud revenue/profit. Kunlun (Baidu’s in-house AI chip) supports China’s national AI strategy in an undersupplied domestic market, with large orders from No.1 customer China Mobile. Arete sees Kunlun sales rising from RMB2bn in ’24 to RMB10-12bn in ‘26E. Kunlun should continue to drive Baidu’s AI Cloud business, with “Other Services” revenue rising at a ~15% CAGR over 2025E-31E. Arete raises their ‘26E EPS to US$6.1 from US$3.7. While they still see risk from declining Ad revenue, they think this is a long-running problem and well understood by the market. Their SOTP model shows Ads make up only 17% of Baidu’s total value vs. ~59% for AI silicon and Cloud services.
M&M’s decision to pre-announce GST benefits - branding itself as a “consumer-first” OEM - may be less about patriotism and more about inventory management. Dealer checks reveal heavy discounting, even on new models like the Thar Roxx, despite expectations for strong festive demand. Wholesale dispatches have trended down since May, with August volumes (~40k) significantly lower than even last year’s levels. Discounts are valid only until Sep 21st, ahead of GST 2.0 implementation, suggesting M&M is flushing dealer stock to enable a push into Oct’s festive peak. While this strategy could boost near-term volumes, it raises margin risk and potential disruption to the EV transition.
Solid passenger demand, disciplined cost control and strategic expansion underpin a positive outlook for Air Arabia. A cornerstone of its growth strategy is the recent launch of a new low-cost carrier in Dammam, aligning with Saudi Arabia’s Vision 2030 by enhancing regional connectivity and diversifying travel hubs. Strategic network growth and continuous fleet modernisation have strengthened efficiency and broadened reach. Revenues are forecast to grow at a ~6.7% CAGR through 2027, with EBITDA margins increasing to ~29.4%. The carrier benefits from strong and consistent cash flow, while a strengthened balance sheet has enabled it to deliver an attractive dividend yield above 7%, making Air Arabia compelling for income-focused investors.
Macro Research
Developed Markets
The ailing world
The global economy is weakening and looks recession-bound, claims Andrew Hunt, who expects markets to be surprised by the extent of the economic weakness over the coming weeks. The bond sell off may have run its course for now. US equities are in a bubble that has been fuelled by continued aggressive debt monetisation in the G7 and China. Many are worried that the bubble could end as global economic growth slows, but Andrew suspects that the World has already entered an easing cycle – particularly in quantity terms which he regards as very much more important than simple rates. Andrew expects that easier monetary conditions will sustain markets in Q4. Next year, Andrew expects to see the inflationary consequences of the current easing cycle and for that reason he expects that higher inflation and the prospect of higher rates will then represent a clear threat to the system’s ability to sustain the bubble next year.
A world of fiscal dominance
The current global liquidity cycle is now 35 months old. Michael Howell remains ‘Risk On’ but emphasises the lateness of this cycle and the growing risks, particularly from fragile repo markets. Global liquidity improved in August, driven primarily by significant policy easing from China’s People’s Bank (PBoC). This occurred despite a very weak Chinese private sector, which continues to struggle with debt-deflationary pressures. Looking further ahead, investors face a world of ‘fiscal dominance’, where massive structural fiscal deficits will require ever-increasing liquidity to facilitate debt financing and rollovers. The stability of the US Treasury market may depend as much on international creditors from Europe and Asia as on domestic factors. While rate cuts from the Fed are anticipated due to weak economic data, and could tactically weaken the US dollar, global liquidity conditions remain far more critical for risk assets than the signalling effect of policy rate changes themselves.
On the topic of fiscal velocity
Stephen Jen and Faith Yilmaz introduce the concept of ‘fiscal velocity’, which measures the ratios of changes in nominal GDP to nominal fiscal spending. They find that Asian countries (ex-Japan) may be more efficient in their fiscal spending compared to European countries, a result of their higher spending on investment goods. In contrast, European countries tend to emphasise consumption (e.g. welfare spending). Highly indebted countries such as Japan and Italy allocate a larger proportion of their budget to debt servicing, resulting in little to show for it in terms of GDP. It has also become somewhat fashionable for developed countries to engage in proactive fiscal and monetary policies; this ‘Alt-Keynesian’ posture of ‘doing-more-is-better-than-doing-less’ has helped contribute to the large fiscal deficits and debt, with modest impact on actual GDP growth. On their measure of fiscal velocity, roughly speaking, Asian countries’ fiscal spending may be 7 times more efficient than their European equivalents.
Europe: The Art of War
It’s been a rough summer for Europeans. The EU-US trade deal is highly unpopular, yet European leaders had little choice if they wanted to keep President Trump on their side in Ukraine. Niall Ferguson expects the European Parliament to ratify the deal. At the same time, EC President von der Leyen is looking to diversify trade deals, and Niall expects one with Mercosur countries to be ratified by year’s end. The EC will also walk back commitments under the Green Deal, including softening emissions targets for the auto industry, which will provide businesses with much needed breathing room. Niall expects frozen Russian assets and higher bilateral support from member states to support Ukraine, with defence-only EU bonds materialising next year. He remains bullish on European defence and dual-use tech.
France: Rising debt, rising instability
According to Brunello Rosa, the resignation of PM Bayrou after a no-confidence vote makes the approval of restrictive fiscal measures even less likely. Once again President Macron chose a loyalist, Sébastien Lecornu, as the replacement. But the likelihood of forming a coalition that could vote through the next budget is very slim, and so Macron may be forced to dissolve parliament. However, the result of new elections may be as inconclusive as the previous two, with three blocks of similar size unwilling to compromise and coalesce amongst themselves. France needs a serious and prolonged period of fiscal consolidation and reform, but this will make Macron even more unpopular, in turn favouring the rise of extreme parties on the far right and the left. If Macron dissolves parliament, he may end up in a cohabitation with an extreme party, which may pave the way for the RN’s victory in the next election.
US: Understating the Ukraine offensive
With Russia’s offensive in Ukraine ramping up quickly, Trump may have run out of time to hold Putin’s feet to the fire. The usual trades to position for increasing geopolitical risk are to buy gold or oil, but David Woo comments that the precious metal is crowded and due for a correction, and Trump wants to avoid higher oil prices. The other market that can price geopolitical risk is VIX. Although the steep term structure of VIX futures prices this to a degree, David believes the low level in the front end understates the urgency of the Ukraine situation. He has bought October VIX future at 18.00 and will take profit on a move to 21 and stop out at 16.8.
US: Shutdown
With just over two weeks left until the US government runs out of funding, the odds of a government shutdown are rising. Unlike recent funding cliffs, both sides are facing competing political incentives to push the funding debate to the brink. At the heart of the issue is the backlash within the Democrats over the last government funding fight. Senate Minority Leader Schumer and a handful of Democratic senators ultimately supported the bill, believing that staving off a shutdown was the least bad option, resulting in weeks of backlash over his decision. Although government shutdowns are often averted at the last moment, there are reasons to believe a last-minute deal won’t materialize this time around. In this case, Democrats believe their healthcare-focused message is a political winner while the GOP believes that offering Democrats a clean funding bill and letting them vote it down will put the blame for the shutdown squarely on them.
US: Recognising recession
The response rate for the US household survey, which produces the unemployment rate, is south of 70% and more than 20 percentage points south of its 2013 high of 90.1%. Fed officials should seriously consider the historical disconnect between QI’s holy grail indicator – the University of Michigan’s Higher Unemployment Expectations (HUE) – and the unemployment rate, which has been higher vis-à-vis HUE in every cycle back to the 1970s. US households are no longer fearful that their incomes can’t keep up with covering the cost of their essentials; it has become a reality. The Quill Intelligence team reiterates their conviction in their bull flattener call.
Emerging Markets
Brazil: Selic rate may go down sooner than expected
The recent adjustment in the Fed Funds trajectory has direct implications for the exchange rate, and with US monetary policy in a loosening phase the Buysidebrazil team project a weaker dollar, with the DXY falling to 97 points. In Brazil, the risk perception remains relatively stable, and the team have calibrated their CDS forecast to 140 points, leading them to revise the exchange rate to BRL 5.50. This brings positive effects for inflation dynamics, especially in the industrial goods segment; the team have adjusted their PRCA forecasts to 4.6% in 2025 and 4.1% in 2026 (previously 4.7% and 4.2%). Now, with a more stable exchange rate, a slowing economy, an inflation risk balance skewed downward, and inflation expectations in the process of re-anchoring, the conditions are favourable for the central bank to start the rate-cutting cycle as early as December 2025.
China: A new drive
William Hess notes that this past week saw the proliferation of annual industry “stable growth plans”. These are consistent with the objectives outlined recently which themselves are consistent with expected top-down emphasis on optimising the economic layout and capacity in the next batch of five-year plans. According to comments from MIIT, the weight of stable growth plans will focus on ten industries: the steel, non-ferrous, petrochemical, chemical, building materials, machinery, automobiles, power equipment, light industry, and electronic information manufacturing industries. These are cited as key forces to stabilize the industrial and national economy. As is the case for the steel sector, William sees the latest annual stable work plans as outlines for pending five-year plans to be released in 2026, focusing on improving high-quality supply capacity, optimizing the industry’s development environment, and promoting the effective improvement of quality and reasonable growth of the industry. It’s all part of Xi’s quality productivity drive.
China: The illusion of growth in China’s trust sector
Given the extreme financial stress in China, some may be surprised by the near record y/y growth in trust AUM to RMB29.6trn in 2024. However, Jonathan Anderson points out that nearly all of the growth came from passive products; true investment and financing trust AUM were essentially flat. Over a third of trust companies are technically insolvent or on the brink, and Jonathan doubts their long-term viability. Looking at the core active trust products, one will see them weighed down by unresolved defaults in the real estate and local government financial vehicle sectors, with freeze clauses on repayments placing a lot of active AUM into limbo. The impending collapse of many companies in the sector is unlikely to be a catalyst for broader financial contagion, but Jonathan mentions that its loss as a credit channel will still have wide implications.
Indonesia: A cautionary tale for EMs
For many emerging markets around the world, Trump’s tariffs on their exports to the US are stressing economies that already were facing formidable challenges, William Pesek reports. The President of Indonesia has been making moves that undermine Bank Indonesia’s independence, shaking investors’ confidence, roiling the country’s financial markets, and risking destabilizing capital flight. Economic mismanagement in Indonesia also has triggered civil unrest. Other vulnerable economies, made more so by the US tariffs, include Brazil, India, South Africa, Turkey, Argentina, South Africa, and Thailand. Each is battling its own set of headwinds, but all seem to be in the same boat in a turbulent sea.
Lebanon: An improving political landscape
The Verisk Maplecroft team’s ESG score for Lebanon has seen recent positive developments, stemming from parliament’s successful election of President Aoun after a two-year impasse and following the country’s first ever sovereign debt default in March 2020. The new government has seen improvements in the team’s Challenges to Government Authority Index, along with a further narrowing of implied spreads on the defaulted debt. The government has also made progress to address economic and banking sector challenges and is now looking to a pending debt restructuring. However, the country is not yet out of the woods. Reconstruction costs resulting from the Israel-Hezbollah conflict sit at USD$11bn, over half of which will need private financing. Nevertheless, the Beirut government is rehabilitating.
South Africa: Duller and calmer, with eyes on the prize
The SARB kept rates unchanged in a 4-2 vote – which Peter Montalto expected would be a close call – but it remains a bit of a surprise given that this week’s CPI and expectations data could have opened a sliver of space. The QPM model moved up the repo path by removing one cut at the end of this year and the coming two, while the inflation track was marked up. Growth for 2025 was revised up to 1.2%, now in line with Peter’s view. Overall, the statement largely sidestepped this week’s CPI and gave inflation expectations only a passing nod; a signal possibly that the MPC wants a broader medium-run, firmer, re-anchoring before moving again. Peter’s baseline is an extended hold of ~10 months, with the next leg down only after a formal target change by Budget 2026, trending towards 5.50% terminal rates into 2028. There is a small risk of one more cut in November, but the bar is high.
Commodities
The unsubsidised truth of offshore wind
James Burdass has been covering the roll out of turbine technologies across the globe. In the US numerous project cancellations have been underway, including Ørsted’s nearly finished Revolution Wind project. James Burdass comments that US offshore wind is caught between the dual pressures of fading IRA credits and a federal government that acts as its landlord. It isn’t an issue unique to the US, with cancellations in countries such as Denmark and Germany, where there was a lack of interest from bidders. Offshore wind is scaling up its machines to astonishing sizes, but the physics of low energy density mean vast investments are required, and only subsidy frameworks make them investable. For now, James says offshore wind remains almost entirely policy-dependent: without subsidies, there will most likely be no bids—and therefore no offshore wind power.
Palladium: The fourth boom
At the Aug 2024 low of USD808, Palladium had collapsed 76% from the 2022 peak of USD3,458. This was the 4th major decline since 2001, and Chris Roberts comments that since then there has also been three booms ranging from 321% to 665%, with the fourth one now underway. Chris’s 50% long position is from USD1,299.50 and his stop is a daily close below USD1,068, which is a near 18% risk (assuming zero slippage).
Uranium: A quirky year for a quirky commodity
Several commodities have their quirks, and uranium certainly fits into that group. Despite such a strong future outlook, and limited new mine production, this year has feen strong for neither the commodity itself nor many of the producers. Uranium spot prices recently peaked in 2024 at over US$100/lb and have traded lower since. The 2025 price has been pretty much range bound between US$65-80/lb. Annual demand of U3O8 is ~80kt (or ~175Mlb) is heavily reliant on power plant demand with contracts signed years ahead of consumption. Year to date the price is up some 7%, making it one of the better performing commodities, i.e. one of the few that hasn’t fallen on global uncertainty and growth concerns. However, supply-demand would have argued for a price move much better, and it has been well overshadowed by others.
Iron ore: Supply chain shocks and limited upside
SGX 62% Iron Ore futures initially jumped US$3.00/t early last week to seven-month highs of US$107.65/t CFR China, as a result of temporary supply shocks, including in Guinea and Brazil. Meanwhile, more countries have announced anti-dumping duties and tariffs on steel imports, although Atilla Widnell now estimates that they have reached critical mass and gone mainstream. Blocked supply chains will now cause Chinese Steel exports to flow back on itself, exacerbating the domestic supply-demand imbalance and sending Iron Ore futures back down to US$105.50/t CFR China. His medium-term outlook sees limited upside potential, and he maintains his outlook of US$95.70-105.14/t CFR China for Q3/2025.
Don’t miss out on the gold rally
Gold stocks have been the top recommendation on Michael Belkin’s US industry group/stock page all year. The VanEck Gold Miners ETF (GDX) is now up +108% ytd after just 1.5 months of inflows, six times as much as the MAG7 +18% ytd gain. The fundamentals remain positive. The Fed’s policy shift waves a green flag toward gold prices, with central banks continuing to accumulate gold as they shift reserves out of the USD. The fundamental attraction for gold miners is finally being recognised, but we are only 1.5 months into the change in perception. GDX has only US$19bn of assets at this point, and the five largest stocks clock in at US$275bn, indicating that it is large enough to accommodate industrial buying, which could dramatically expand the market cap of related stocks as the rally continues. Michael’s recommendations include small-cap stocks that have lagged the GDX advance, including Galiano Gold, McEwen, Seabridge Gold and Equinox Gold.