Asset manager Carmignac expects the second half of 2026 to be defined by persistently high long-term interest rates, AI-driven investment and a more fragmented global economic landscape.
Speaking during the firm’s H2 outlook press conference, portfolio managers said that investors should prepare for an environment in which growth, inflation and large fiscal deficits keep government bond yields elevated for longer than markets have traditionally expected.
A key theme of the presentation was what Carmignac described as the “japanisation” of the Chinese economy. Analysts said Beijing continues to prioritise technological self-sufficiency through industrial policy, export support and state-directed investment. While these measures support strategic sectors, they also risk suppressing domestic consumption and reinforcing structural weaknesses in the banking system.
The firm also highlighted geopolitical fragmentation and resource nationalism as key forces reshaping markets. Rising infrastructure costs, technology controls and competition for strategic resources are expected to influence inflation dynamics and capital allocation decisions across regions.
Carmignac said that technology giants are committing billions of dollars to AI infrastructure, data centers and semiconductor production. Demand linked to AI continues to grow at a pace exceeding current supply, supporting investment across the semiconductor and power-generation value chains. However, the sustainability of returns will depend on whether the sector can generate enough profits to justify the capital expenditure. It added that capacity expansion of large-scale data centers remains disciplined despite demand growth.
Carmignac warned investors against assuming that lower energy prices alone would revive spending. Luxury goods remain exposed to wealth effects, while consumer staples face longer-term structural challenges, the firm said.
In credit markets, the asset manager sees limited room for further spread compression but maintains that European high-yield bonds continue to offer attractive carry opportunities.
Carmignac also identified risks, including elevated equity valuations, a revival in initial public offerings and the possibility of renewed upward pressure on sovereign bond yields.
