12 Mar 2024
2 minutes
Throughout history it has been nearly impossible to plan for the future. As experienced most recently, when the world was thrown into turmoil during the pandemic. Markets are still recovering and experiencing the aftershocks. What will 2030 hold? While human affairs are fundamentally unmodellable, we believe it makes sense to prepare, in the words of Peter Drucker, “for the future that has already happened.”
This means generally that the outcomes of events and trends which have already taken place will unfold over time. The recent conflicts in Ukraine and Gaza, are likely to have three consequences that will resonate well into the coming decade.
First, military spending is on track for its biggest increase since the end of the Cold War in 1991. Euro area countries are ramping up production and spending to meet the dual objectives of supplying arms to Ukraine while addressing their own military needs. By 2028, European defence spending is expected to exceed pre-invasion levels by €100bn1. Projections also suggest that defence spending outside Europe could rise by an additional US$200bn over the next five years compared to pre-invasion estimates.
Of course, the true cost could be higher than current estimates. For example, 2024 marks the first year that European NATO allies will spend a targeted 2% of their combined GDP on defence expenditure1, a six-fold increase since 2014. If the leaders among them were to increase their spending by just 0.5% of GDP, annual global defence expenditures would balloon by US$700 billion. This equates to a potential increase of 1.2% to 2.8% of global capital expenditure (capex), which considering global GDP is about 3%, is significant.
Second, geopolitical events in recent years have created a global divide. This has spurred the emergence of the “Global South,” a growing coalition of mostly developing countries, which notably includes India and China. This group, with deep rooted values and histories, is increasingly assertive on the global scene. In addition, the growing tension between the US and China, as well as the acceleration towards a multipolar world, has shifted trade routes and repositioned traditional economic structures. As a result, new investment opportunities are emerging, particularly in developing nations, including frontier markets.
Finally, recent conflicts have accelerated investment in climate solutions and in dual-use technologies. Skyrocketing energy prices, initiated by the Ukraine war, have ignited Europe's green transition, potentially shaving five to ten years off the timeline. Households and governments are rapidly shifting towards electric vehicles, heat pumps, greater energy efficiency, and renewable power. Meanwhile, the war's reliance on long-range weaponry and electronic warfare underscores the timeless link between conflict and technological innovation.
We believe there are several promising themes that can lead to returns as long as investors are careful about valuations. However, investors should brace for challenges that could reshape the macroeconomic landscape, increasing the likelihood of unpredictable growth and inflation patterns over time. Historically, this kind of economic climate usually leads to less diversification potential and lower stock values. The consequences of “the future that has already happened” are likely to be profound for investors.
1 Source: Nato
Financial markets were broadly positive in May. Global equities advanced, led by technology stocks as AI enthusiasm remained a key driver of performance. Bond markets were more volatile, with a sharp mid-month sell-off driven by inflation concerns and uncertainty surrounding the US-Iran conflict. However, sentiment improved later in the month as hopes of a US-Iran deal increased, helping oil prices to fall sharply and supporting both sovereign bonds and credit markets. Commodities were mixed overall, with industrial metals advancing while Brent crude recorded its largest monthly decline since the pandemic.
Financial markets surged in April, defying geopolitical tensions. Global equities delivered their strongest gain since late 2020, led by technology and AI-linked stocks, even as the US-Iran conflict kept oil prices elevated and complicated the inflation outlook. Government bonds weakened as higher energy prices pushed out rate cut expectations, while credit markets performed well in the risk-on environment. Commodities were mixed: industrial metals advanced, oil was volatile, and gold was flat. Investor sentiment improved as markets looked past near-term risks and focused on resilient earnings and structural growth themes.
Ninety One’s Capital Market Assumptions framework focuses on the key drivers of long-term performance. We do this to better understand possible future returns, enriching discussions with our clients.
Ninety One's multi-asset growth team provides insights into the macroeconomic environment that informs our investment outlook for the coming quarter. This includes concise summaries of our asset class views.
Global markets took a decisive turn in the first quarter (Q1) of 2026, as early optimism gave way to a geopolitical shock. A strong start to the year was derailed by escalating conflict in the Middle East, triggering a sharp surge in oil prices, reigniting inflation concerns and forcing a rapid re-pricing of interest rate expectations. The result was a broad-based risk-off move across global markets, with macroeconomic factors reasserting themselves as the primary drivers of market performance.
Easy globalisation is over: multipolarity, bottlenecks and public dissatisfaction are reshaping the world. For investors, that means old assumptions are less reliable and resilience matters more.
The closure of the Strait of Hormuz has triggered a severe global oil supply shock, leaving the market with a deficit that available alternatives cannot meaningfully offset. While prices have yet to fully reflect the strain, tightening inventories and disrupted flows point to higher near-term volatility and a lasting shift in the oil price outlook.
Oil markets have reacted sharply to the effective closure of the Strait of Hormuz. Paul Gooden, Head of Global Natural Resources at Ninety One, explains why the disruption is reverberating through oil and gas markets, how supply constraints are pushing prices higher, and what it could mean for energy markets in the weeks and months ahead.
Financial markets were broadly positive in February. US Treasury yields declined and global equities posted gains on resilient economic data. However, technology stocks had a weaker month, selling off amid concerns about potential disruption from AI. Commodities were again strong: precious metals continued to rally, while oil prices rose, partly on fears of escalating conflict in the Middle East. US-Israeli strikes on Iran took place on the final day of the month after most financial markets had closed. Meanwhile, the US Supreme Court struck down some of the tariffs imposed last year, although new levies were soon introduced via an alternative legal route.
War in the Middle East has brought one of the market’s long-standing geopolitical fault lines into sharp focus, particularly the risk of disruption in the Strait of Hormuz. Against an already fragile backdrop, the key question is whether this episode remains contained or escalates into a shock with global economic consequences.
A noisy month in geopolitics drove up market volatility, but global equities made gains – helped by signs of strength in the global economy. US dollar weakness and inflows from investors seeking diversification boosted emerging market (EM) assets. In fixed income, softer inflation data supported European bonds, but political uncertainty jostled Japan's yield curve. Commodities made a strong start to the year.
Ninety One's multi-asset growth team provides insights into the macroeconomic environment that informs our investment outlook for the coming quarter. This includes concise summaries of our asset class views.
Sahil Mahtani, Director of Ninety One’s Investment Institute, and Paul Gooden, Portfolio Manager for Global Natural Resources, discuss Venezuela and broader energy themes following the Goldman Sachs Global Energy Conference in Miami.
Risk assets capped a strong year with gains in Q4. Equities rose, while credit and emerging markets fixed income also delivered healthy returns. Oil lagged, but other commodities finished on a high, with precious metals extending their advance. The US Federal Reserve cut interest rates twice during the quarter, but officials made it clear that the bar for further easing is rising.
Sahil Mahtani, Director of Ninety One’s Investment Institute, and Nicolas Jaquier, EM Fixed Income Portfolio Manager, are joined by Phil Gunson, Senior Analyst at the International Crisis Group, who is based in Caracas for an on-the-ground perspective on the rapidly evolving situation in Venezuela.
Emerging markets outperformance tends to happen in multi-year cycles. The question for 2026 is whether we are closer to the end or the beginning of this EM cycle. There is strong evidence that it is the latter.
After a disorienting 12 months, investors need to recalibrate their perceptions of risk – a ‘Goldilocks’ macro environment is likely to prevail in 2026. But while conditions appear ‘just right’, thoughtful positioning is required within each asset class.
2026 opens with uneven growth, elevated debt and valuations that leave little margin for error. Resilience and precision in positioning will matter more than ever.
Maduro’s exit raises the chance of change, but power is likely to remain with the security state as the US opts for pressure and negotiation over regime overhaul. Markets appear ahead of reality, with any improvement in oil and debt outcomes likely to be slow and uneven.
November brought a shift in tone, with global equities pausing their seven-month ascent as valuation and policy risks reasserted themselves. Hawkish central-bank signals and fatigue in the AI trade weighed on markets mid-month, before softer data and a calmer Fed helped steady sentiment. Fixed income markets were mixed as shifting rate expectations pulled markets in different directions, while credit delivered gains despite strain in the riskiest segments. Gold remained supported and copper firmed on supply concerns.
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