Institutional Research

BofA expects only 1% constant-FX growth in Chinese luxury demand in 2027 and forecasts 4% global luxury growth, reflecting muted consumer confidence, weaker jewellery and watch trends, and fiscal pressure on high-net-worth consumers.

• Sector revenue growth is forecast to slow to about 4% constant FX in 3Q26, a 270bp deceleration from 2Q.
• BofA cut sector revenue estimates by about 1% and EBIT/EPS estimates by 2-3% for 2027-28.
• Chinese consumers account for 29% of sector revenue, making weak China demand material for the global sector.
• Hard luxury is relatively resilient, but Mainland China jewellery sales fell 14% year-on-year in 3Q26TD.
• Hong Kong continues to capture Chinese offshore spend, supported by tourism, FX and high-net-worth consumption.

Morgan Stanley maintains an In-Line industry view for late 2026 through 2027. The report highlights durable DX, cloud, AI and modernization demand, while differentiating companies by execution, margins, valuations and company-specific risks.

• The industry view is In-Line despite solid demand and recent sector underperformance.
• Morgan Stanley expects share-price recovery in line with profit growth.
• Preferred rated names include NRI, NEC, Fujitsu, Otsuka and OBIC Business Consultants.
• AI adoption is presented as a source of productivity, higher-value services, recurring revenue and new product demand.
• Company catalysts center on quarterly revenue, operating profit, margins, orders, ARR, client additions, pricing and AI monetization.

JPMorgan’s high-frequency trackers show export momentum strengthening into September and government bond issuance catching up. The report nevertheless finds soft auto demand, persistent property-sector adjustment and uneven industrial activity.

• Departing non-tanker ship tonnage rose 5.8% year on year in August and 16.1% month to date in September.
• September government bond issuance was RMB1.56tn month to date and is expected to approach RMB2tn for the month.
• Passenger-car retail sales fell 19% year on year during September 1–6, while NEV sales declined 3%.
• New-home sales in 30 major cities remained down 5.4% year on year in September month to date, while secondary-home sales rose 18.2%.
• Rising energy and petrochemical prices contrast with a wider drag from agricultural food prices on headline CPI.

The report forecasts real GDP growth of 3.8% in 2026 and 3.3% in 2027 as AI-related technology exports, profits and capex accelerate. The boom strengthens fiscal and external balances, while raising upside risk to the Bank of Korea's terminal policy rate.

• Real GDP growth is forecast to rise from 1.1% in 2025 to 3.8% in 2026 and 3.3% in 2027.
• Real exports are expected to grow about 11% in 2026, led by technology volumes and prices.
• JPMorgan targets a 3.75% terminal policy rate by 2Q27, with upside risk.
• The current-account surplus is forecast at US$435 billion in 2026 and US$457 billion in 2027.
• Construction remains a drag even as consumption and equipment investment recover.

Management expects loan growth of about 17% through 2026-27, supported by customer upgrading and market-share gains. Goldman Sachs sees a more balanced earnings backdrop as NIM compression moderates, asset quality improves and dividend returns rise.

• Management expects approximately 17% loan growth in 2026-27.
• NIM has declined from above 1.8% one to two years ago to about 1.7%, but further compression is expected to moderate.
• Corporate NPL ratios remain below 0.3%, while consumer-loan asset quality improved in 1H26.
• Full-year DPS of approximately Rmb0.13 per share appears achievable; management described a dividend yield above 4% as a longer-term objective.
• Goldman Sachs retains a Rmb42.57 12-month target price, implying 23.1% upside from Rmb34.59.

JPMorgan’s expert seminar takeaways point to near-term strength in container rates from port congestion, weather and route disruptions. The outlook turns more cautious over the medium term as new vessels arrive, routes normalize and competition intensifies.

• The expert’s base case assumes Strait of Hormuz disruption persists until at least end-2026.
• Global shipping volume rose about 27% from 2Q23 to 2Q26, while TEU-mile demand rose about 41%.
• About 19 percentage points of TEU-mile demand growth reflected longer voyages caused by the Red Sea crisis.
• Asian port congestion is viewed as largely temporary, with inland logistics improvements helping to ease bottlenecks.
• Newbuild deliveries and route normalization could create excess capacity in the medium term.

Available Q3 indicators suggest slower luxury demand than in Q2, led by weaker US spending and tourism, softer Chinese consumption signals, and decelerating Korean department-store sales. Barclays remains Neutral on European Luxury Goods & Specialty Retail.

• US Barclaycard luxury spending slowed to about 2% year-on-year in August from about 11% in July; Q3-to-date growth was about 6% versus about 16% in Q2.
• Korean luxury department-store sales slowed to about 29% in July after a strong Q2 supported by the stock-market boom.
• Barclays expects flat sector growth between H1 and H2, below consensus expectations for a roughly 100bp H2 acceleration.
• Gucci continued like-for-like price reductions into September, creating an estimated roughly 3% year-on-year pricing headwind for the month.

The report updates coverage-level forecasts for European metals and mining equities, contrasting Goldman Sachs estimates with spot-price and consensus cases. It retains Buy ratings on Rio Tinto, Glencore, Norsk Hydro, Antofagasta and Lundin Mining, while BHP and ArcelorMittal are Neutral.

• Goldman Sachs forecasts 2026 copper at US$13,369/t versus a US$14,491/t spot price, before US$13,800/t in 2027.
• The report uses base, spot and +/-10% commodity-price scenarios to show the effect on revenue, EBITDA, cash flow, leverage and valuation.
• Rio Tinto, Glencore, Norsk Hydro, Antofagasta and Lundin Mining carry Buy ratings; BHP and ArcelorMittal are Neutral.
• Spot-price assumptions create especially large forecast differences for Glencore, Rio Tinto and selected copper-focused miners.

Bank of America expects further Fed tightening to support the dollar tactically, but balanced global data and other hawkish central banks should limit a sustained DXY breakout. The report favors JPY and selected Asia FX fundamentals while warning that crowded EM carry and higher US yields leave vulnerable currencies exposed.

• BofA expects two further 25bp Fed hikes in October and December.
• The report forecasts USD/JPY at 149 by year-end and retains a bullish JPY bias.
• DXY technical analysis targets 100.67, 101.17 and 101.80 while support near 99.16 holds.
• Crowded MXN, ZAR and BRL carry positioning increases downside risk for EM FX.
• KRW is supported by semiconductor exports, corporate dollar selling and improving portfolio flows.
• The report expects the SNB to remain at 0% and stay on hold until 2028.

Higher interest rates put debt back into focus, but Barclays finds most U.S. software vendors well positioned. CoreWeave and WhiteFiber stand out for elevated leverage tied to AI data-center build-outs, where pricing and contract economics remain central to execution.

• Oracle, IBM, Microsoft and CoreWeave have the largest net-debt balances.
• WhiteFiber and CoreWeave are the only covered vendors above 3x net debt/adjusted EBITDA.
• Barclays views high AI-infrastructure leverage as temporarily distorted by the lag between data-center CapEx and revenue recognition.
• CoreWeave cited short-term compute contracts priced at about $40mn per MW.
• The industry view is Positive.