Last week: strong US job report; low US CPI (lower UST yields); Gold, SMEs, Japan and EM equities are all in favour
WEEKLY TRENDS
Sectors rotation as well as expected lower US rates, were combined to push SME stocks up (Russell index is up 5.5% YTD vs -3% for the Nasdaq). Thanks to a few large market caps, Europe is not doing too badly (EU50 up 2.5% YTD)
The latest victims of the AI disruption, were on Tuesday the Wealth Managers (e.g. St James) and Insurance brokers, on Wednesday the Real Estate services (e.g. CBRE), and on Thursday the Logistics companies (e.g. Kuehne Nagel)… while Utilities were outperforming as a safe haven from this AI disruption play
The US NFP showed strong job creations in January at +130k vs +55k expected and confirmed the Apr 2024-March 2025 down revisions (-898k in line with expectations). The US Jan CPI was published weaker (lowest level since 2021) pushing UST yields much lower (-15bps) keeping FED rate cuts expectations well alive for June
Q4 earnings shall continue this coming week with Airbus, Danone in Europe and Walmart, Analog Devices in the US just to name a few
NB Chinese markets are closed all of next week (Chinese New Year) reopening on Tuesday week, US are closed on Monday (Presidents’ day).
Alphabet new $15bn bonds to fund AI ($100bn demand reported)
Nota Bene
Cryptos valued at $2.3trn vs $4.3trn last October’s peak
51% of the Kospi YTD (+30%) due to just 2 stocks: Samsung and Hynix
CALENDAR
Earnings releases: USAnalog Devices (18 Feb), Walmart (19), Warner Bros (20) EURio Tinto (19 Feb), Airbus (19), Danone (20)
Macro data releases: US Jan FOMC/FED minutes (18 Feb), Dec PCE (20)
WHAT ANALYSTS SAY
Vanguard: Global dividends 2025, fifth consecutive record
BNPP: Choose your poison, geopolitics or AI
Eurizon: Japan's stock market benefits from structural change and political stability
Vanguard, 12 February 2026
Author: Viktor Nossek, Head of Investment & Product Analytics
Global dividend distributions rose by 5.3% in 2025 compared with the previous year, reaching a new record high. After a disappointing third quarter marked by a 0.2% decline in payments, linked to the postponement of the distribution schedule of Chinese megabanks, dividends rebounded in the last quarter of the year, posting a 7.7% year-on-year increase to reach $673 billion. Over the year as a whole, companies distributed a total of $2.3 trillion – a level never before seen.
This new record – the fifth in a row – is particularly remarkable this year given the high market volatility fuelled by numerous geopolitical uncertainties and the growing influence of artificial intelligence. It not only demonstrates companies' continued willingness to share their profits with shareholders through dividends, but also highlights the stabilising role of dividends in portfolios, both for retail and institutional investors. In particular, investors whose strategy is based on high-yield assets have seen around a third of their total return over the last five years come from dividends alone.
Developed markets contributed significantly to distribution growth last year, with an increase of $94 billion, representing 83% of the total increase of $113 billion. Europe excluding the United Kingdom (+10% year-on-year) and Japan (+11% year-on-year) recorded double-digit growth, while North America (+5% year-on-year) and the Pacific region (+4% year-on-year) also contributed significantly to this new record.
At the sector level, the financial sector stood out in particular with $75 billion in dividends distributed (+14% year-on-year), followed by the industrial sector with $29 billion (+13% year-on-year). The technology sector also recorded a 15% increase, reinforcing its growing importance in dividend-focused strategies.
In 2025, China occupied a unique position in two respects.
On the one hand, the aforementioned changes to the distribution schedule led to significant volatility in payments, concentrated in the first quarter. On the other hand, China stood out for its notable growth in distributions.
Despite economic challenges such as a persistent slowdown in the property market, sluggish consumption and deflationary trends, China contributed significantly to global growth with $317 billion in dividends paid (+7% year-on-year).
China thus stands out from other emerging markets, which recorded a 1% decline in distributions compared with the previous year. Energy companies, once among the world's largest dividend payers, have significantly reduced their payouts. In total, energy sector dividends fell by $59 billion in 2025 compared to the previous year (-18%), of which $53 billion was attributable to emerging market companies.
Dividends could receive a boost in 2026.
Rising prices for precious and industrial metals are strengthening cash flows in the industrial and commodities sectors, two areas traditionally associated with high yields. At the same time, growing scepticism about artificial intelligence and ‘MAG7’ stocks, which are considered overvalued, is increasing the appeal of high-yield value stocks.
In an environment where investors are placing greater emphasis on stable distributions and more reasonable valuation levels, companies with strong balance sheets and sustainable payout ratios could continue to expand their dividend policies. Diversified global strategies focused on high dividends are therefore likely to play a key role in 2026 – both in stabilising overall portfolios and as a reliable source of regular income.
BNP Paribas AM, 12 February 2026
Authors: Daniel Morris, Chief Market Strategist
If it is not geopolitical shocks that are disrupting the markets, it is artificial intelligence, either because AI is a bubble or because it clearly is not, but will then wreak havoc on economic models and the job market. Last week's news highlighted various aspects of AI's disruptive power.
Announcements of even greater investment by companies such as Alphabet, Google's parent company, point to lower profit margins. The growing availability of open-source AI tools means that competitors' revenues will be lower (which reduces the justification for massive capital expenditure). It is difficult to quantify the extent of the impact on the labour market, as well as consumers' appetite for the creative destruction of AI, at a time when professionals' skills are suddenly losing much of their value and jobs are being lost.
The novelty of AI as a market factor, combined with fierce competition in the sector, means that surprises of this kind are to be expected (remember DeepSeek?). Since last summer, the technology sector has been twice as volatile as the rest of the market. It will take time for analysts to assess the net impact of all these factors and adjust their earnings forecasts. In the short term, therefore, caution is warranted. Nearly half of the companies in the Nasdaq 100 index have yet to report their results. While earnings growth for companies that have already reported appears solid, averaging +11%, it is only in line with expectations, whereas investors are accustomed to more significant positive surprises each quarter. For the S&P 500, earnings growth is stronger (+14%), as are sector surprises (+8%), which partly explains why non-technology stocks are performing particularly well. Regardless of some disappointing results, CEOs are becoming less optimistic about the future. The proportion of positive forecasts provided by companies has declined, although it remains at a historically high level
Although tactical caution is warranted, we remain strategically optimistic. Volatility in technology stocks has been accompanied by superior returns (although this has not been the case recently, admittedly). Since last summer, the trend line for global technology stock performance has nearly doubled in steepness.
Even if the growth rate of tech stocks' earnings could be revised downwards, it should nevertheless remain significantly higher than that of non-tech stocks. According to current estimates, tech companies' earnings are expected to grow by 31% this year, compared with only 10% for non-tech companies (for the past year, the corresponding figures are 26% and 6%) . The size of this gap means that it will be difficult for non-tech stocks to outperform tech stocks on a sustained basis, unless there is a significant deterioration in the latter's earnings outlook or a reduction in the tech earnings multiple.
The valuation risk is arguably greater for value stocks than for technology stocks. The z-score of the forward price-to-earnings (P/E) ratio for the Nasdaq 100 is 0.2, while that of emerging market technology stocks is at its long-term average (z-score of zero). However, the scores of some value indices are significantly higher. The MSCI Japan Index and the Russell 1000 Value Index have P/E z-scores of 1.8. Europe is an exception, with a score of 0.5, which is slightly above average but not extreme.
Recent events only underscore the importance of diversification in the technology sector, both in terms of business areas and regions (both developed and emerging). While diversification is always a valuable component of a portfolio, it is even more essential given the rapid evolution of the technology sector. Virtually all players are susceptible to disruption, but it is likely that the disruptive factor will be found elsewhere in the index. Losses on a given stock should be offset by gains on another stock, and overall profits should continue to grow.
Eurizon, 11 February 2026
Authors: Joel Le Saux, Portfolio Manager, Head of Japan Equities
The Japanese stock market is currently in excellent shape. After exceptional price rises in recent years – the TOPIX Total Return has gained an average of 25% over the last three years – structural factors are playing an increasingly important role in investment prospects. At the heart of this dynamic is the transition from a long-standing deflationary environment to an inflationary regime. This regime change improves the pricing power of Japanese companies and supports earnings growth, which has already been strong for a decade.
In addition, corporate governance reforms and increased capital discipline are having a positive impact. The Tokyo Stock Exchange's corporate governance code was introduced more than ten years ago. Companies are now placing increasing importance on shareholder remuneration and share buybacks in particular. Buybacks now represent a volume comparable to the amount of dividends and contribute to EPS growth of around +2%.
At the same time, the structure of many companies has changed significantly. Japanese companies have greatly internationalised their production base and have evolved from exporters to multinationals. Profits are therefore less dependent on short-term exchange rate fluctuations, as long as the yen remains within a normal fluctuation range. Despite this structurally favourable environment, valuation remains a key factor. The market is trading at its highest valuation level in more than ten years (with the exception of 2020), which means that most positive expectations are already priced in.
Market sentiment has been buoyed by the results of the recent elections. Investors interpret the clear victory of the ruling coalition, which won around two-thirds of the seats, as a sign of political stability, a factor which, based on experience, supports risky assets. Against this backdrop, the ‘Takahishi trade’ has also regained importance. As a result of this momentum, the market has already risen 13% since the beginning of the year, entering a phase of irrational exuberance. Political events show that they can also have an impact via rising forward premiums in the bond market, which indirectly affects equity valuations. The government is considered to be relatively cautious in terms of its budgetary policy. The current stance is proactive rather than strongly expansionary.
Interest rate environment and risks
The normalisation of monetary policy and rising yields are changing market conditions. Interest rate-sensitive sectors, such as real estate, could come under increased pressure, while banks and other financial institutions should benefit. Key risks include a rapid appreciation of the yen and a sharper-than-expected rise in long-term bond yields.
Conclusion
The Japanese stock market is currently undergoing structural changes, driven by inflation, reforms and increased shareholder focus by companies. Political stability provides short-term support. At the same time, rising valuations and yields increase sensitivity to macroeconomic and political impulses.
Contacts
8 Kievyan Street, Yerevan, Armenia
+374 10 712 259 +374 43 004 182
unibankinvest@unibank.am info@unibankinvest.am
Disclaimer
The information presented in the document contains a general overview of the products and services offered by Unibank OJSC (registered trademark – Unibank Invest, hereinafter referred to as the Bank).
The information is intended solely for the attention of the persons to whom it is addressed. Further dissemination of this information is allowed only with the prior consent of the Bank.
The information is only indicative, is not exhaustive and is provided solely for discussion purposes. The information should not be regarded as a public offer, request or invitation to purchase or sell any securities, financial instruments or services. The Bank reserves the right to make a final decision on the provision of these products and/or services to a specific customer, including refusing to provide products and/or services if such activities would be contrary to applicable law.
No guarantees in direct or indirect form, including those stipulated by law, are provided in connection with the specified information and materials. The information presented above cannot be considered as a recommendation for investing funds, as well as guarantees or promises of future profitability of investments.