Institutional Research

The report argues that Medicare Advantage and Medicaid margins are turning upward, while transparent PBM models, specialty pharmacy concentration, value-based care, and AI create longer-term healthcare-services opportunities.

• Medicare Advantage margin expansion is expected to reach about 100 bps in 2026, followed by roughly 50 bps annually through 2030.
• Managed Medicaid margins are expected to improve as rate trends approach 5% versus 4% cost trend in the second half of 2026.
• Traditional PBM margins appear to have reset to a durable 1.5%-2.0% range, with new services offering a route to renewed growth.
• CVS, Accredo, and Optum together control nearly 70% of specialty pharmacy, though vertical-integration scrutiny is a material risk.
• Bernstein expects Optum Health to recover from its 2025 loss as risk is repriced and value-based care adoption expands.
• Optum Insight's provider-side AI opportunity could extend from administrative efficiency into clinical workflow automation.

Mega-cap growth and technology have outperformed sharply since late July, yet positioning remains below prior extremes. The report flags rates volatility and elevated systematic allocations as the main near-term constraints for broader equities.

• MCG & Tech rose 14% from end-July while the rest of the S&P 500 fell 3%.
• MCG & Tech positioning reached 0.79 standard deviations above neutral, or the 80th percentile, below prior peaks.
• Systematic equity positioning is elevated, while discretionary investors remain comparatively cautious.
• Weekly equity funds posted $10.2bn of outflows, led by $21.2bn from US funds.

Deutsche Bank argues that influential German industrial associations are becoming more hawkish on China-related dependencies. It nevertheless expects Germany and the EU to rely mainly on existing, targeted trade-defence tools rather than introduce broad new barriers.

• The BDI argues that inaction on strategic dependencies would be more costly over the long run than de-risking.
• The BDI and VDA favour existing instruments such as anti-subsidy tariffs over new trade-policy tools.
• The report expects a minimalist German and EU policy response aimed at avoiding a broader trade conflict.
• German policymakers may look to Japan's approach to securing critical raw-material supplies.

Global equity funds recorded $10bn of net outflows in the week ending September 23, reversing the prior week's $80bn inflow. Fixed-income flows remained positive, led by short-duration and inflation-protected bond funds, while long-duration funds saw outflows.

• Global equity funds saw $10bn of weekly net outflows after $80bn of inflows in the previous week.
• US funds drove developed-market equity outflows, while China funds drove emerging-market outflows.
• Technology, financial and industrial sector funds recorded the largest equity-sector outflows.
• Fixed-income funds received $17.4bn of weekly inflows, with continued support for short-duration and inflation-protected products.
• Cross-border FX flows stayed positive, led by demand for USD and EUR.

Bernstein sees USD/JPY 150 as a neutral FY2027 benchmark for inbound sales and argues that a stronger yen would primarily reduce ex-China visitor volumes rather than spend per visitor. PPIH has the highest inbound and tax-free exposure, while diversification and lower inbound mix limit the earnings risk for most other covered companies.

• Japan recorded 36.9 million inbound visitors in 2024, while inbound spending rose 53% year on year to ¥8.1 trillion.
• Chinese arrivals fell 61% year on year in January 2026 and were still down 59% in August; Bernstein assumes they remain at the 2026 trough in 2027.
• Ex-China arrivals are modeled using their historical relationship with USD/JPY; shopping spend per visitor is assumed to stay near US$400.
• At USD/JPY 130, Bernstein estimates inbound revenue declines of 57% for PPIH, 55% for Asics and 56% for Fast Retailing versus the 150 benchmark.
• The refund-based tax-free system beginning 1 November 2026 may add purchase and departure friction despite an unchanged tax benefit.

The S&P 500 gained 1.2% for the week as AI inference, agentic AI and optical networks outperformed. The desk sees less adverse systematic-flow pressure but remains alert to elevated yields, oil, geopolitical developments and month-end selling.

• AI Inference Chips rose 7.03% for the week, Agentic AI gained 6.31%, and Optical Networks advanced 6.22%.
• US equities were net sold, but Information Technology was the most net-bought sector for a fourth consecutive week.
• Institutional US-index net length fell from 48% of open interest in May to 36% through mid-September; the desk does not expect systematic selling to continue in its baseline scenario.
• The desk considers a short in the GSXUNPTC Non-Profitable Tech basket compelling after a 100bp-plus rise in the 10-year yield and more than 20 percentage points of one-year outperformance versus the S&P 500.

High-frequency consumption and mobility measures generally improved, while production signals were mixed and local-government special-bond issuance remained below the year-ago level. The tracker also highlights higher domestic fuel prices, a modest rise in oil demand, and changes in the renminbi and money-market indicators.

• Primary-market property transactions increased over the week and exceeded the year-ago level.
• Domestic flights and traffic congestion rose, while flight cancellations declined.
• Steel production fell slightly, but coastal-provincial coal consumption rose and was above its year-ago level.
• Domestic gasoline and diesel prices increased by RMB395/tonne and RMB385/tonne on September 25.
• Local-government special-bond issuance reached RMB3.33tn year-to-date but remained below the year-ago level.

Nomura interprets the Q3 MPC statement as a shift toward firmer growth support amid weak domestic demand, while still expecting no policy-rate or RRR cut through end-2026. It expects policy-bank deployment of RMB800bn in new financing tools to be the near-term support channel.

• The Q3 statement removed “cross-cyclical adjustment” and emphasized stronger counter-cyclical adjustment.
• Nomura expects no policy-rate or RRR cut by end-2026.
• Policy banks are expected to deploy the planned RMB800bn financing tool, potentially lifting Q4 credit and fixed-asset-investment growth.
• The PBoC warned against FX-market herding as RMB appreciation has accelerated.

Microsoft has consolidated Copilot functions into Home, Code and Autopilot, broadening its enterprise AI proposition. Deutsche Bank retains a Buy rating and highlights Microsoft’s model neutrality, business context, installed base and enterprise expertise.

• The new Copilot “super app” combines portfolio functionality across three tabs: Home, Code and Autopilot.
• Microsoft reported more than 30 million paid M365 Copilot seats as of the prior quarter.
• Advanced features are metered and off by default while customers address cost, data-governance and ROI questions.
• Copilot pricing is evolving toward a mix of per-user pricing and usage-based Copilot Credits.

Tigermed's new orders rose about 30% year-on-year in 1H26, aided by volume growth and higher pricing. Goldman Sachs remains Buy-rated, citing resilient biotech demand, accelerating pharmaceutical demand, overseas opportunities and AI-led productivity gains.

• New orders grew about 30% YoY in 1H26, including a 5-6% blended price increase.
• Recent new-contract pricing increases reached about 10%; backlog conversion should support revenue and margins progressively from 2027.
• Early-stage biotech remains the main order-growth contributor, while domestic and multinational pharmaceutical demand is accelerating.
• The H-share 12-month target price is HK$52.10 and the A-share target is Rmb65.90.