Barclays PLCBARC
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Barclays PLCBarclays strategists recommend reducing some equity risk exposure heading into September, citing seasonal market patterns, moderating economic activity, and renewed pressure from interest rates and energy prices, while maintaining a constructive medium-term outlook for equities. Strategist Emmanuel Cau said market conditions have become more volatile following the calmer summer period, and advised "less beta and more tactical hedges," noting that a lot of hawkishness is already priced in. The bank highlighted September's historically weaker seasonality, particularly before U.S. midterm elections, and pointed to softer U.S. activity data and the diminishing effect of second-quarter earnings. Barclays economists expect the Federal Reserve to raise interest rates twice more during 2026, with further tightening by the European Central Bank and Bank of Japan, and identified oil prices as a source of uncertainty, with the U.S.-Iran standoff unresolved and energy prices in "the danger zone." The AI-related equity trade is becoming more mature, with greater divergence among companies, but Barclays sees these hiccups as manageable, citing resilient global growth, near-20% earnings-per-share growth, and valuations favoring equities over bonds. As part of its positioning, Barclays reduced overall beta, lowered construction materials to marketweight, and raised insurance to marketweight, while staying constructive on capital-expenditure opportunities in industrials, technology, and mining.
Barclays PLC