What to remember:

Economic and market outlook

• Given very positive US corporate earnings, low unemployment and robust GDP data, we expect a short-lived contraction in the US and inflation above the 2% target by the end of the year.
• From an investment standpoint, political and geopolitical risks in China outweigh economic potential.
• Anticipations and expectations on China have, sometimes, been over-inflated. Nevertheless, we remain confident regarding our growth forecasts around 5.6%.
• A year ago, Europe did not seem attractive to investors. Today, European stock markets are performing best. The situation is identical in China: as seen in stock prices, investors are currently extremely pessimistic. However, this could quickly change.

Energy transition

• In the United States, the energy transition is expected to continue at a modest pace compared to Europe and China.
• In China, the energy transition is a top priority on the economic and strategic agenda. For example: the share of electric vehicles represents 26% of new cars sold in China (vs. 7% in the United States).
• However, when it comes to energy transition, we must think global rather than local. And China is part of the global solution.
• Although hydrogen has been identified as a key element in achieving carbon neutrality by 2050, the core of the energy transition remains the production of renewable energy (wind, solar, hydraulic...)

Artificial Intelligence (AI)

• There is not just one AI model such as ChatGPT. To imagine a specific AI taking over others could be absurd. There will be several market players and several winners.
• Appropriately used, AI will combine the best of both worlds: increased productivity, via process automation, and lower costs.
• The question is not how to divide the world into digital democracy or dictatorship, but how to bring AI into democracy. This will happen through regulation and best practices in companies providing such services.
• Investment opportunities in pure play companies active in AI remain limited: they are only a few and non-liquid, therefore highly volatile, and their business model often to be defined.