AI momentum and market strategy (with Yvonne Man, David Ingles)

Asks if investors should continue to chase the same AI trade given the momentum and capex visibility.

Yvonne Man

Galvin Chia

The market is focused on momentum, but DWS tries to diversify. Leading names in Korea have earnings support. The key driver is earnings, and capex is very important. Memory companies now have long-term (3-5 year) contracts, providing structural comfort.

The market is one-way and concentrated. Investors should look at the whole AI supply chain (compute, memory) and ask 'what next?' after GPU and CPU.

Asks if earnings visibility is a good way to determine which stocks to buy, comparing Korea (visible earnings) to China (longer runway but less visible earnings).

David Ingles

Galvin Chia

The market rewards Korea for its earnings visibility. For China, one must be more selective, focusing on tech/industrial stocks (e.g., auto components) that benefit from trends like humanoid robotics, as the consumer sector is weak.

China's overall market is not moving much due to the weak consumer sector, but specific tech/industrial names offer reasonable valuations and growth potential.

Asks if the bond market is the right place to price in inflation risk while equities are for momentum.

Yvonne Man

Galvin Chia

Short-term inflation will pick up but is temporary, not structural. Oil futures suggest a short-term price increase, with DWS forecasting oil back to $80 in 12 months. The bond market has already priced in inflation risks and rate hike expectations.

All-in yield perspectives, especially in the short end and IG, look quite attractive.

Asks if it's time to go overweight bonds.

David Ingles

Galvin Chia

DWS still prefers equities because that's where you can get earnings growth.

Asks if equities, specifically AI, are the best hedge against inflation.

David Ingles

Galvin Chia

AI is a good way to play inflation, market momentum, and the future of the economy.

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