At J.P. Morgan’s recent 2026 Asia Pacific Macro Conference, the challenging macroeconomic cycle and an increasingly complex geopolitical climate were top of mind for attendees.
Where can investors find the most compelling opportunities as they navigate these volatile times?
Risk management strategies are more important than ever
Markets have had a turbulent start to the year, but the Iran conflict has further exacerbated volatility. Following the military operation, oil prices surged before paring some gains, while stocks tumbled and then rebounded. In the event of a prolonged conflict, elevated risk premia could persist for some time, especially in commodities markets.
Consequently, many investors have turned their attention to de-risking their books. “Like any prudent risk manager, if I don’t know what the path [ahead] is, my first reaction is to reduce the risk — and I think that’s what the market has been doing,” said Vikas Gupta, head of Trading, Asia Currencies and Emerging Markets at J.P. Morgan.
For instance, as Edward Franklin, global head of Currency and Emerging Markets Sales at J.P. Morgan, observed, there has been significant deleveraging of positions across LATAM, with investors looking to decrease their exposure to debt amid heightened uncertainty.
Diversifying across asset classes can also safeguard against market volatility. For example, investing in real assets such as gold, which has a low correlation with stocks and bonds, can help boost portfolio resilience in a risk-off environment. “Gold is far more compelling in this environment, so we’re certainly keeping our focus there,” shared Raymond Eyles, CEO of Brahman Capital Management.
From left: Edward Franklin, global head of Currency and Emerging Markets Sales at
J.P. Morgan; Vikas Gupta, head of Trading, Asia Currencies and Emerging Markets at
J.P. Morgan
A rotation away from the U.S. and into global assets is underway
Diversification across regions is becoming key, too. While U.S. assets are still in high demand, investors are increasingly moving toward emerging markets (EM) and other international markets, which have attractive valuations after years of underinvestment. “I think we’re seeing a lot of rotation under the hood. If you’ve run a 20-year bull market in the U.S. kind of unhedged, then why wouldn’t you start taking some chips off the table to diversify into Europe or Japan or Korea?” asked Mitesh Parikh, co-head of Discretionary Macro and Fixed Income at Schonfeld.
Indeed, Japanese and Korean equities have grown in appeal thanks to factors including corporate governance reforms, whereby companies are shifting from holding excess cash to increasing shareholder value. There have also been large inflows into the Japanese yen, which is still considered cheap, having declined significantly against the U.S dollar in recent years.
Other up-and-coming investment destinations include India and Indonesia, which feature high-growth economies, robust domestic demand and favorable demographics in the form of a sizeable working-age population. “It’s a good mix to have as a counterbalance to the overweight U.S. that everybody has,” said Ronnie Roy, co-founder, CEO and CIO at RV Capital Management.
Overall, while there has been a rotation away from U.S. assets, Hemant Baijal, head of Macro Alpha and co-head of Emerging Markets Debt at Invesco, noted that it’s important to distinguish between cyclical and structural flows. “I think the current flow is more cyclical in nature, primarily because the hegemony in the room is still the U.S.,” he said. “To get more structural flow, you need growth — and while EMs are growing, they’re not [yet doing so] at a material pace to attract that capital.”
As such, the U.S. remains a dominant force on the global stage, especially as it accounts for over half of global equity market capitalization and continues to dominate the AI theme. “We're not pricing in some massive dollar devaluation or the end of U.S. dominance from that perspective,” Parikh added.
The 2026 Asia Pacific Macro Conference in Singapore drew hundreds of attendees from
across the region
The dawn of a new commodities supercycle
While geopolitics have roiled commodities markets, the overall outlook for the metals complex remains bullish. According to Gregory Shearer, head of Base and Precious Metals Strategy at J.P. Morgan, gold prices could soar to $6,300/oz by the end of 2026, buoyed by rising investor allocations and central bank buying. Silver prices, too, could continue rallying on the back of strong industrial demand, though the risk of a sharp reversal is high.
These forecasts could signal the onset of a new commodities supercycle — a prolonged period of sustained price increases that are well above their long-term trend. “Supercycles generally go on for quite a while, a decade or longer, and this is still very much in the early stages,” Eyles explained. “This supercycle is also a little different to the one that we saw in the 2000s. It’s a little more sector-specific … we’ve seen it very much focused on the precious metals sector initially, and then, to a lesser but still reasonable extent, the industrial metals complex.”
However, investors should note that volatility is a core feature of supercycles, and large price swings are likely. “I think we need to be prepared for the unexpected — think 30–40% moves in commodities [prices],” Eyles added.
From left: Raymond Eyles, CEO of Brahman Capital Management; Hemant Baijal, head of
Macro Alpha and co-head of Emerging Markets Debt at Invesco
Identifying bright spots and bottlenecks in AI
As Roy summed up, “AI is now table stakes, but it’s not yet a source of alpha.” On one hand, the technology is increasingly viewed as foundational across various industries, and large amounts of capital are being deployed in this space. On the other hand, however, many companies are still struggling to translate their AI investments into measurable profits.
Then there’s also the power bottleneck, with AI’s vast energy requirements outpacing what the grid can currently provide. “It’s not so much going to be a compute problem; it’s going to be the fact that there’s not going to be the power to generate the compute that is needed,” Parikh said.
All in all, while AI promises to be one of the most transformative technologies of this era, investors should exercise caution around current valuations, especially as the landscape continues to evolve rapidly. Ultimately — as with other sectors and industries — a focus on strong company fundamentals is key when it comes to separating long-term winners from the pack.
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