Last week : Oil much lower, Risk-On continues (new stock indices ATH) Corporate spreads lower, RE and PE higher
WEEKLY TRENDS
Strong earnings (US banks reported combined profits of $50bn in Q1, a record quarter as traders took advantage of volatile markets, especially in equities) coupled with signs of de-escalating conflict in the Middle-East, confirmed a full Risk-On mode for the 3rd week in a row, pushing risky assets to new highs (new SP500 All Time High ATH, mostly due to AI and other Tech stocks).
Note that the Corporate Q1 earnings releases were not all great, as Kering, Wells Fargo, Netflix suffered from medium to bad results. US PPI for March was released lower than expected (headline at +4% vs 4.6% expected).
Central banks’ officials seem to believe the worst of oil price increase is behind them, as some ECB and BOE officials are now indicating that inflation increases will only be temporary, the most lasting damage being a slower economic growth.
There is now a 70% chance of a FED rate cut this year (-20bps vs -60bps prior to the Iran war) while 2 rate hikes are still discounted for the ECB later this year (30 April meeting is expected to show an unchanged rates decision from the European central bank, despite March headline Eurozone inflation at 2.6%).
MARKETS
Equities
Q4 earnings weekly performances :
GS, MS (+7%) JPM (+1%) BOFA (+3%) Wells Fargo (-3%) Citi (+6%)
CB meetings to come : BOJ (28 April) FOMC/FED (29) ECB (30) BOE (30)
WHAT ANALYSTS SAY
Financiere de l’Echiquier : Brazil is reaping an unexpected windfall
AXA BNPP : Peace and then what?
DPAM : Semi-conductors, from recovery to a supply crisis
La Financière de l’Echiquier, 17 April 2026
Author : Alexis Bienvenu, Portfolio Manager
At $100 a barrel for Brent crude, compared with around $65 before the Hormuz crisis, Petrobras has become a cash cow for the state, which holds a majority stake in the company.
It’s party time! Money is pouring in! It’s flowing freely, glistening with the dark lustre of black gold. For with the explosion in oil prices caused by the blockade of the Strait of Hormuz, Brazil is reaping an unexpected windfall. At $100 a barrel for Brent crude, compared with around $65 before the Strait crisis, the oil company Petrobras is becoming a cash cow for the state, which holds a majority stake. In 2026, the oil giant’s share price had indeed surged by 80% by 16 April. A godsend for President Lula, who is staking his re-election next October at the age of 80. An opportunity to shore up his electoral base with subsidies.
Alas, just like the carnival, the ‘black gold’ bonanza has its downside: the price at the pump. For whilst Brazil has risen to 9th place among the world’s top exporters, it remains a major importer of petroleum products. With refining capacity ill-suited to its production levels, it relies on foreign imports, particularly for diesel. The result: lorry drivers, who are essential in this vast country, are threatening to bring the country to a standstill through a strike, much like the blockade in 2018 that crippled the economy. With just a few months to go before the presidential election, such a crisis would certainly spell defeat for the incumbent president, the champion of the ‘Workers’ Party’. In response, Lula the progressive, host of COP30 in 2025 in the Amazon, is heavily subsidising oil consumption by cutting taxes and ardently defending the exploitation of promising new oil fields off the mouth of the Amazon, in the ‘equatorial margin’, against the wishes of environmentalists.
But generosity towards the energy sector may not be enough: Lula’s designated political opponent, Flavio Bolsonaro – son of the former president sentenced to 27 years in prison – wants to go further: privatise Petrobras, abolish all federal taxes on hydrocarbon consumption and feed a ‘reserve fund’ through royalties levied on oil, based on a model inspired by Norway. This would allow prices at the pump to be smoothed out through subsidies whilst benefiting from high global prices. The best of both worlds. The upcoming election will therefore depend in part on the situation in the Strait of Hormuz. An oil-driven election, with global repercussions given Brazil’s role in the global oil supply. But the strait does not only affect black gold. It also shapes another vital pillar of the Brazilian economy: agriculture, through fertilisers. Brazil, the world’s leading soya producer and China’s main supplier in this sector, is in fact 85% dependent on imports of foreign fertilisers to keep the agricultural sector of its economy thriving. Yet a large proportion of these fertilisers pass through the strait. If it does not reopen soon, the 2026/2027 soya harvest, to be planted next autumn, will be jeopardised.
The result would be agricultural, social and commercial tensions – and even diplomatic ones, as the repercussions would be felt as far afield as China and Europe. Faced with the prospect of widespread price rises, the Brazilian population is under severe strain. This is all the more so as interest rates could rise again, just as they had begun to fall. Brazil’s hangover, following the oil-fuelled boom, could therefore prove to be as long as the Amazon River.
AXA IM - BNPP AM, 14 April 2026
Author : Chris Iggo, CIO AXA IM, BNPP AM
If tensions in the Gulf do indeed ease for good, we will once again be able to focus on how to build resilient portfolios, so it is important to pause for a moment to take the pulse of the markets. There are many themes that are likely to resurface as key drivers of investment trends.
Nothing has changed in the valuation framework; from a fundamental perspective, central bank interest rates are considered to be close to neutral and long-term inflation expectations are firmly anchored. As such, medium-term nominal yield forecasts range from 3.5% to 4.5% for Treasury bills, from 2.5% to 3.5% for European government bonds, and from 4.5% to 5.0% for UK gilts.
For yields to rise further, central banks will need to return to a regime of lower interest rates.
From a tactical perspective, credit has become more attractive. Some would argue that spreads are too tight – since 1996, they have been wider around 86% of the time, in both the investment-grade and high-yield markets denominated in US dollars. There is a certain asymmetry in the outlook. However, fundamentals and strong demand for credit continue to underpin the market.
More aggressive portfolio strategies need to include a component of equities. However, what is worrying is that, despite the slight fall in price-to-earnings ratios in recent weeks, many markets (and individual shares) remain expensive relative to their long-term averages.
The global outlook has been clouded by events over the past six weeks, but the parties to the conflict have so far sought to avoid the worst, and the recent all-time highs in the equity markets, the technology sector and software company share prices appear to represent legitimate price targets if peace is maintained.
Two themes are likely to make a comeback: the performance of the US equity market and the continued appeal of non-US equities. In a more uncertain world, equity diversification is more important than ever.
The same applies to diversification across asset classes and portfolio positioning in terms of risk tolerance: low-risk, low-yield government bonds, investment-grade, high-yield and emerging market credit, and volatile but high-yielding equity markets.
Investors cannot be blamed for sitting on the sidelines. Uncertainty is high, despite the apparent desire of the US and Iran to reach a peaceful solution. It is clear that they both have a different idea of what that solution should look like, which is bound to destabilise the markets. But global growth will eventually regain its footing and returns can be generated over the long term.
DPAM, 13 April 2026
Authors : Eros Portillo Spetaliere, DPAM Equities analyst
The semiconductor cycle recovery is proceeding at a steady pace. A few months ago, most industry players predicted that the semiconductor industry’s revenue would reach the $1trn mark by 2030. However, given its current growth rate – attributable in part to high memory prices – this threshold could be reached as early as 2026. It is becoming clear that the market has entered a phase of supply shortages.
Demand for AI chips remains exceptionally strong because, given the extraordinary growth in token consumption, the industry is still constrained by computing power. Thus, at its GTC (GPU Technology Conference) dedicated to AI, Nvidia announced that it had revised upwards its forecast for cumulative revenue from Blackwell and Rubin systems, raising it from $500bn for 2025–2026 to at least $1trn for 2025–2027. It is important to note that this extraordinary level of demand driven by AI is beginning to put pressure on the rest of the industry.
This is particularly the case for the microprocessor (CPU) market. The shift towards agent-based AI and inference (the ability of an AI model to generate results by applying its knowledge of training data to previously unseen data) is causing a significant shift in demand for microprocessors intended for traditional servers and is driving a cycle of traditional server upgrades by cloud computing providers. According to AMD, the market for data centre CPUs is expected to grow at a compound annual growth rate of 18% until 2030 (compared to 4% between 2022 and 2024). Supply must therefore adapt. This increase in demand, combined with that for AI accelerators, is clearly reflected in the rise in capital expenditure by TSMC, the world’s largest semiconductor manufacturer. Having invested around $30bn in 2024 and then $41bn in 2025, TSMC plans to increase its capital expenditure to $52bn, or even $56bn, in 2026.
In the analogue sector, there are also signs that the rapid growth of AI data centres is beginning to affect the supply of chips intended for non-AI applications. This supply constraint is driving up prices, which helps to finance part of the additional investment made necessary by the rise in demand.
A third segment, and arguably the one with the greatest impact, is memory. Whether high-bandwidth (HBM) or dynamic (DRAM), the memory chip is a critical component for AI data centres. However, each new generation of Nvidia microprocessors requires greater memory capacity than the previous one. Furthermore, the HBM memory chip has a significant impact on supply, as it consumes around 3 times more wafer capacity per bit than traditional DRAM, this ratio is expected to rise further to 4 as the industry moves towards new generations of HBM.
It is also important to bear in mind that building a semiconductor fab is a complex process that takes several years.
All these factors suggest that the semiconductor industry is no longer merely in a phase of cyclical recovery, but has entered a phase of AI-driven recovery characterised by a supply shortage.
The intensity of demand for AI-related infrastructure has effects that extend far beyond the accelerator sector. It is helping to constrain supply in other segments and to determine the prices of logic and memory chips.
It is also triggering the start of a new cycle of investment in production capacity.
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.