Last week : new ATH for US stock indices - Oil lower - Gold higher - Yields lower - USD fairly stable - strong US job report
WEEKLY TRENDS
New All Time High (ATH) for the Nasdaq (+4.5% Wow) and the S&P (+2.5%) led by semi-conductors and AI infrastructure related Tech stocks (AMD +20% on the week, Nvidia at an ATH on Friday, Google and Apple at a new record too). EM (mostly due to S. Korea) benefitted too, so did the Nikkei (+7% and +5.5% respectively) while EU stocks underperformed comparatively (+0.5%) impacted by higher Oil prices.
April US NFP job report showed stronger than expected figures at +115000 jobs created vs +65000 expected, reinforcing the soft landing. Goldman Sachs now predict FED rate cuts to be delayed to December/March. Bond yields were lower across the board (-5 to -15bps).
FX was fairly stable (note another series of possible BOJ interventions last week), Oil price was lower (-6% vs +8% the previous week) Gold was higher due to a weaker USD and higher US yields, BTC broke the $80k mark. All eyes on the US inflation figures for April to be released next Tuesday (CPI) and next Wednesday (PPI). Next major Q1 corporate earnings shall only be on 20 May (Nvidia and Analog Devices) and on 28 May with Dell.
US curve steepening (2-10 years) fairly stable at +47bps (-2bps)
HY corp. spreads lower : US at +279bps (-4bps) EU at +273bps (-7bps)
Commodities
Oil price WTI much lower (-6%) OPEC decided last Sunday to increase its production by +188k barrels per day. Note that the US continue to drain its SPR to export to Asia (SP reserves down 5.2MM last week, -22MM in April, while exports increased by 4.7MM last week).
Gold price higher (+2%) due to lower US yields and weaker USD. Silver at +7% WoW, Copper (+5%) led by shortage of sulfuric acid (Hormuz)
Crypto
BTC (+2.5%) breaking the $80k mark (NB in Brazil, eFX providers will no longer be allowed to use Stablecoins, BTC to settle overseas remittances)
Under the watch
10 stocks drove 70% of the +16% SP500 rally since 30 March (Google and Nvidia alone represent 25%, together with Amazon, Intel, AMD, Apple, Microsoft, Broadcom, Micron Tech)
Nota Bene
Samsung hit $1trn market cap. last week, joining TSMC in the elite club
US stocks valuation premium over EU is at record high (SP500 forward PE at 21 times while EU600 trade at 14 times) the widest since 2008
CALENDAR
Earnings releases :USCisco (13 May) Nvidia, Analog Devices (20) Dell (28) EUSiemens Energy (12 May) Siemens AG (13)
Macro Data releases : US April CPI (12 May) PPI (13)
WHAT ANALYSTS SAY
Credit Mutuel: Contingent Convertibles (Cocos) outperformance of HY bonds in April
Fidelity: The adoption of AI now extends far beyond the technology sector alone
Vanguard: Global dividends hit a new high in the first quarter of 2026
Credit Mutuel AM / La Francaise AM, 8 May 2026
Author : Paul Gurzal, Head of Credit
Following the lead of the equity markets, subordinated debt has largely recouped the losses incurred in March, at least in terms of spreads.
CoCos significantly outperformed all other credit sectors (including High Yield), with a return of +2.4% over the month, whilst insurance and banking Tier 2 bonds gained +1.1% and corporate hybrid debt +0.9%.
CoCo spreads have almost returned to their pre-crisis levels, falling from a high of 317bp to end the month at 257bp (vs. 246bp on 26/02).
Insurance Tier 2 bonds ended the month at 117bp, compared with 111bp on 26 February, whilst corporate hybrids stood at 171bp, compared with 154bp on 26 February.
The underperformance of corporate hybrids in terms of spread narrowing is due to a very high level of activity in the primary market.
Hardly a working day went by during the second half of April without at least one new issue.
The market, which has already seen more than €30bn issued since the start of the year, is diversifying in terms of sectors and geographies, with new entrants attracted by
· this rapid means of raising accounting equity at a low cost compared to senior debt (less than 100bp on average since the start of the year)
· Moody’s more accommodative methodology, which allows for less restrictive issuance formats for issuers
For cyclical issuers seeking to strengthen their balance sheets ahead of a less favourable macroeconomic climate, the market represents a good opportunity to improve their accounting debt ratios.
Among the issuers this month, we note Stora Enso, Elia, Grand City Properties, Var Energi, Amprion, Abertis, Redeia (Red Electrica), Roquette Frères, General Mills and Engie.
It should be noted that financial subordinated bond issues have been relatively subdued during the same period.
The earnings season is proceeding smoothly for European banks.
We note fairly stable trends in non-performing loan ratios, a slight increase in provisions as a precautionary measure, and capital ratios that have logically fallen in Q1 (a normal seasonal trend).
The major European investment banks (Deutsche Bank, Barclays, BNP, SocGen) are reporting lower results compared to their US counterparts.
Fidelity International, 8 May 2026
Author : Terry Raven, Research Director
Despite growing concerns about a potential tech bubble, artificial intelligence is increasingly seen as a structural driver of growth and productivity. Observations on the ground suggest that, unlike other market segments, the technology sector currently shows no widespread signs of overvaluation.
Confidence among management teams remains high, buoyed by the visibility of investments and the prospects for a sustainable improvement in margins and earnings. This does not, however, mean that caution is unnecessary. The debate over the sustainability of the current cycle remains valid, and certain segments have undoubtedly experienced periods of excessive enthusiasm. But, on the whole, the available data puts the idea of widespread irrational exuberance into perspective and instead points to a profound transformation currently underway.
AI-related capital expenditure consistently exceeds expectations and feeds into the entire value chain: infrastructure, hardware, semiconductors and upstream suppliers. The growth generated by AI is not linear but exponential, which complicates its integration into traditional valuation models, which are often overly cautious in the face of paradigm shifts.
In the semiconductor sector in particular, high valuations go hand in hand with solid fundamentals: upward earnings revisions and persistent supply-demand imbalances. Conversely, the sharp decline in software stocks appears, in part, to be excessive. The notion that AI will rapidly replace SaaS models does not fully account for the enduring advantages of many companies: network effects, proprietary data, deep integration with clients and regulatory constraints.
Similarly, AI is transforming the role of IT departments without rendering them obsolete. Integrating AI agents into complex organisations requires expertise in data management, multi-system orchestration, application development and governance. In many markets, these realities limit the rapid substitution of external service providers, even if this dynamic will take time to be reflected in the financial markets.
The adoption of AI now extends far beyond the technology sector alone. Productivity gains are already being seen in most sectors: finance, retail, manufacturing and energy. These benefits remain uneven, but they are tangible and measurable.
Contrary to some fears, the impact on employment most often results in increased productivity rather than massive job cuts. AI enables the automation of repetitive tasks, the reskilling of staff and the refocusing of human resources on activities with higher added value. Human labour remains central, but it is shifting towards greater supervision, customer interaction and the management of complex processes.
AI is currently attracting unprecedented levels of investment, which naturally fuels speculation. However, the revenue already generated by the major players shows that value creation is not merely a promise for the future. In many cases, it is already happening – sometimes more visibly than one might think.
Vanguard, 5 May 2026
Authors : Viktor Nossek, Head of Investment and Product analytics
Global dividend payouts rose in the first quarter of 2026, exceeding their long-term trend to reach a record high of $421bn. By way of comparison, $394bn had been paid out in the first quarter of 2025, representing an increase of 6.7%.
In the first quarter, developed markets accounted for almost all of the net growth. Year-on-year, distributions in Europe (excluding the UK) rose by 34% to $68bn. However, the main driver of these record levels was, as is seasonal, North America, with a 9% rise to $205bn. The region thus accounted for nearly half of global distributions. Dividends also rose in the UK, Japan and the Pacific region.
In the first quarter, two sectors stood out in particular. In North America, financial stocks were by far the main driver of growth, contributing $8.3bn (31% of global dividend growth), buoyed by a capital surplus and resilient profits. Dividend increases and the acceleration of share buybacks followed the success of US banks in the Federal Reserve’s stress tests. Of the $205bn in dividends paid out in North America, $45bn came from the financial sector, clearly illustrating its disproportionate influence. In Europe excluding the UK, growth was largely concentrated in the healthcare sector: a few pharmaceutical groups accounted for most of the increase, supported by higher annual dividends paid out in March, against a backdrop of solid fundamentals. Thus, of the $17bn in dividend growth in Europe, $7bn came from healthcare.
This strong performance offset the declines seen in China and the emerging markets, which were mainly attributable to base effects, particularly in the financial sector. Overall, North America and Europe contributed $27bn to growth, whilst China and the emerging markets weighed negatively on overall momentum. However, the $10bn decline in dividend payouts in the Chinese financial sector does not reflect a weakening of fundamentals, but rather stems from a calendar shift: the four largest banks have switched to a half-yearly payout schedule and paid the interim dividends for the first half of 2025 as early as December 2025. This front-loading shifted part of the payments to the 2025 calendar year, thereby limiting the amounts available in the first quarter of 2026. This shift weighed on Q1 distributions, even though the annual distribution capacity remained unchanged.
Emerging markets (excluding China) also recorded a year-on-year decline, due to an exceptionally strong first quarter of 2025, driven mainly by Brazilian financial stocks. Despite Brazil’s continued importance as a source of high dividends in absolute terms – as well as a more stable BRL/USD exchange rate – dividends remained below their previous year’s level.
In the second quarter, Europe excluding the UK is expected to dominate global dividend payouts, reflecting the structurally significant nature of the dividend season in April and May. Energy and commodities stocks could also become key drivers again in 2026, should prices remain high against a backdrop of persistent geopolitical risks.
In an environment where investors are increasingly favouring stable income and lower valuation risks, companies with strong balance sheets and sustainable payout ratios could continue to strengthen their dividend policies.
Diversified strategies focused on high dividends are therefore likely to continue to play an important role in 2026 – both in stabilising portfolios and as a reliable source of regular income.
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