Company Interview / Are your ASX investments turning against you?

Key points:

Geopolitical tensions and energy prices seen delaying global inflation normalisationAI and Nvidia $NVDA viewed as key supports for US equities, less so for GDPAustralia seen underperforming, with weak growth but relative strength in mining and CapEx-linked names

Alexandre Ventelon from Morgan Stanley sets out a cautious global outlook, highlighting the impact of ongoing geopolitical tensions centred on Iran on growth and inflation. Ventelon states these tensions push out inflation normalisation and keep the macro picture uncertain, with global growth expected to slow in the near term. He points to higher-for-longer interest rates, with the Federal Reserve seen on hold this year and potential rate cuts only next year, while Europe may move more cautiously on easing.

In Ventelon’s view, US growth remains supported by artificial intelligence investment, with companies such as Nvidia $NVDA illustrating strong earnings momentum in the technology “picks and shovels” space. He argues, however, that the net GDP boost from AI is more muted due to high imports, meaning the AI boom appears more clearly in earnings than in headline economic data. Overall, he characterises global growth as “muddling through”, led by a US economy more resilient to energy shocks.

Turning to Australia, Ventelon is notably more conservative. He cites three rate hikes, hotter inflation and tighter fiscal settings as weighing on confidence, and sees GDP growth at only 1.2%. He prefers US and international equities, staying underweight Australia but constructive on domestic mining and CapEx-exposed sectors (ASX: BHP), (ASX: RIO).