Keep vigilant and carry on - July Macro Snapshot

Jul 07, 2026

This week's charts and research highlights from Variant Perception.

Chart of the Week

The Iran-induced inflation impulse will likely be transitory.

Our Macro Risk Indicator remains “risk-on” with limited impact from Iran so far. The risk-on message is corroborated by a rise in insider buys across global equities.
SpaceX IPO is reminiscent of the Juniper Networks IPO from 1999 that marked the start of the mania phase of the equity rally. Historically, major market tops are characterized by narrowing market breadth, restrictive monetary policy, and mounting liquidity headwinds. We have NOT reached this inflection point yet.
The inflationary impulse from the conflict in Iran is expected to be transitory. While energy costs are mechanically pushing headline inflation higher, underlying core pressures across housing, labor, and small businesses remain well anchored.

Speakers: Tian Yang (CEO & Head of Research) & Hugh Vuillier (Head of Client Relations)

Cyclical Asset Allocation: Macro Risk Indicator remains “risk-on”, limited impact from Iran
Equity Market Breadth: Keep an eye on equity breadth as early warning sign in 2H26
Policy Shifts: Policy tailwinds turning to headwinds, one to watch in 2H26 rather than immediate risk
Inflation: US core inflation LEI subdued on muted housing and small business activity
Labor: US labor market still NOT inflationary and NOT recessionary

Equity: Earnings expectations are elevated, seeing some late cycle amber warnings
Sector Allocation: OW: Semis, Energy, Financials, Healthcare; UW: Consumer, Non-Semi Tech
Fixed Income: US 10y yield moderately above fair value range of 4-4.25%
FX: USD rally has room to run, but politics means Liberation Day levels are a ceiling
Commodities: Neutral cyclical outlook, crack spreads remain large, gold down 25% from highs