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Halfway through the year, and despite almost every headline, global equity markets are higher.
Consider what the first six months delivered: a war involving Iran, oil prices grinding higher, and inflation expectations on the rise. On paper, the ingredients for a difficult market. And yet equities advanced. It is a timely reminder that, over any meaningful horizon, markets do not trade on headlines. They trade on earnings.
Earnings were the defining story of the first half. The strength of global earnings growth more than offset the geopolitical
headwinds, driven above all by the artificial-intelligence capital-expenditure supercycle. This is no longer a US phenomenon: the AI-driven investment boom is now lifting earnings revisions across emerging markets. The economies that build, supply, and power this build-out are increasingly on the right side of it. Beyond technology, reflationary assets performed well: small- and mid-cap equities and commodities both outperformed. Government bonds, gold, and bitcoin were left behind.
The lesson of the first half is straightforward. In a world of elevated uncertainty, staying invested was the rewarding
strategy. Waiting for the headlines to clear would have carried a real cost.