Pictet and Indosuez Diverge on US Equity Outlook

Arun Sai, senior multi-asset strategist at Pictet, argues that while earnings growth is broadening into sectors like industrials and utilities, the US market remains overly reliant on a handful of AI-linked mega-caps. With 70 percent of US earnings growth tied to this narrow concentration, Sai warns that valuations leave little margin for error. He prefers emerging markets, projecting a 56 percent earnings growth rate for the region this year, and has upgraded gold to overweight as central bank demand surges.

Conversely, Adrien Roure of Indosuez expresses a more constructive view on US markets. He emphasizes that the current investment cycle remains robust and suggests that small and mid-cap stocks—recently hindered by high real rates—are poised for a turnaround. While Roure acknowledges the risks of leverage in Asian semiconductor markets, he views any short-term corrections as entry points. Regarding fixed income, the firms also diverge: Pictet avoids extending duration due to inflation concerns, whereas Indosuez favors short-dated euro area maturities and high-quality local currency debt in emerging markets.