AI rally meets weak consumers, and healthcare innovation

Summary

---

Moving Markets – May 26, 2026

Episode: AI Rally Meets Weak Consumers, and Healthcare Innovation

Host: Bernadette Deco
Guests: Mike Rauber (Market Analyst), Dr. Damian Ng (Next Generation Research Analyst)

---

Episode Overview

This episode of Julius Baer’s Moving Markets podcast delivers a two-part analysis:

1. A roundup of recent global financial markets, including the ongoing AI-driven rally and consumer sentiment concerns.
2. An in-depth conversation with Dr. Damian Ng on healthcare innovation, the investment case for health systems, and the evolving intersection with AI and public trust.

---

Market Recap and Key Themes

Guest: Mike Rauber

AI-Driven Rally and Consumer Sentiment

• Market Movements

  • US: S&P 500 gained nearly 1% last week, led by semiconductor stocks, particularly after Nvidia’s strong earnings.
    • "Semiconductor stock stocks did the heavy lifting in terms of performance, wasn't it?" ([00:46])
  • Europe: The Stoxx EU 600 rose 3%. Italy’s FTSE MIB hit a record high; Ferrari unveiled its first fully electric five-seater model (€550,000). ([01:38])
  • Asia:
    • Japan: Nikkei up over 3% due to yen weakness and softer inflation.
    • China: Down slightly; tech stocks (Alibaba, Tencent) lagged, but semiconductor optimism is rising due to a rumored UA technology breakthrough for AI chips.
    • Emerging Markets: Up over 1%; IT sector now 39% of the MSCI EM Index—higher than the S&P 500.
      • "Information technology at 39% of the MSCI Emerging Markets index is now higher than in the S&P 500." ([02:20])

• Consumer Confidence Drop

  • University of Michigan’s Consumer Sentiment Index hit a record low, notably among Republicans, attributed to high gasoline prices and Middle East uncertainty, marking "the lowest under the current Trump administration." ([01:20])

• Monetary Policy Developments

  • Kevin Walsh became the new US Fed Chair. While President Trump supported Fed independence, he simultaneously called for lower rates, presenting "a difficult spot between political pressure and inflation risks." ([02:38])
  • Fed Governor Waller emphasized fighting inflation, pushing expectations for a rate hike.

• Geopolitical Tension & Commodities

  • Peace hopes in the Middle East seesawed as US strikes hit Iranian missile sites.
    • "Brent crude dropped more than 7% on the peace talks yesterday, but it is up 2% in Asia to $98 per barrel... still below $100 per barrel, which is just seen as an important psychological level." ([03:18])

• Upcoming Events & Data

  • Focus on US inflation indicator (PCE), global GDP and inflation numbers, and key corporate earnings (Salesforce, Dell, Marvell).
  • "Quad ministers meet in New Delhi on the Indo Pacific and the Middle east ahead of the Shangri La dialogue in Singapore…" ([04:46])

---

Healthcare Innovation & Investment Outlook

Guest: Dr. Damian Ng

The Shift: From Therapies to Systems

• Disease Surveillance vs. Cures
  • “Ebola highlights that even well-characterized pathogens can escalate rapidly when detection and response lag. This does shift the investment lens…toward a more balanced deck that includes surveillance and rapid diagnostics.” ([06:08])
  • Investors are advised to value “data pipelines and testing capacity as core assets rather than as secondary supporting tools.”
  • Diagnostics and surveillance are less disease-specific, thus more resilient and offer broader diversification.

Adaptable Biotech Platforms vs. Single Solutions

• Platform-Based Approaches
  • “Diseases driven by the environment and human behavior…highlight the need for adaptability rather than precision around a single pathogen.” ([07:16])
  • Platform technologies (e.g., modular vaccine/drug platforms) can be reconfigured quickly for new threats, offering shorter development cycles and risk mitigation.
  • "Long term advantage lies in flexibility, the ability to respond not just to known threats, but to evolving and unforeseen ones." ([07:35])

AI in Healthcare: Hype vs. Bottleneck

• Where Value is Created
  • “AI is definitely speeding up early stage discovery by improving target identification and failure prediction. But the primary constraints on value creations…reside downstream, that is in clinical validation and real world deployment.” ([08:28])
  • Greatest investment opportunities may emerge where “AI intersects with trial design and evidence generation.” ([09:20])

The Real World Delivery Gap

• From Tech to Impact
  • “The widening gap between technological capability and real world delivery signals a major reallocation opportunity. Scientific breakthrough can often struggle to translate into population level impact…” ([09:40])
  • Strong argument for investment in health infrastructure: “data sharing frameworks, logistics, digital platforms and last mile delivery.”
  • These have “more predictable adoption curves and scalable economics” versus high-visibility, high-risk frontier science.

Public Trust as Investment Risk

• Trust as a Core Variable
  • “Public trust is increasingly a determining factor in whether new health technologies succeed. Scientific efficacy alone is no longer sufficient.” ([10:53])
  • Investors should now see trust as a “material risk variable,” affecting timelines, uptake, and returns.
  • “Organizations that proactively build trust and communicate clearly are more likely to convert innovation into sustained real world adoption.” ([11:45])

---

Notable Quotes & Memorable Moments

• On AI hype:
  “AI’s impact is significant but partial. It compresses early timelines without fully resolving the structural bottlenecks of the system.”
  — Dr. Damian Ng ([08:52])

• On health system investments:
  “Innovation is only as valuable as its reach, and closing the delivery gap is central to capturing that value.”
  — Dr. Damian Ng ([10:26])

• On trust:
  “Adoption depends on perception, communication and institutional credibility. So rising polarization and misinformation…can slow uptake, ultimately distorting demand.”
  — Dr. Damian Ng ([11:03])

---

Key Timestamps

| Timestamp | Segment | |-----------|------------------------------------------------------------------------| | 00:43 | US & European markets recap | | 01:38 | European market highlights & Ferrari's EV milestone | | 02:09 | Asia market overview | | 02:38 | US Fed leadership and policy outlook | | 03:18 | Middle East developments and commodity reactions | | 05:48 | Transition to healthcare innovation with Dr. Damian Ng | | 06:08 | The need for early disease detection and system investment | | 07:16 | Platform-based biotech approaches for evolving disease threats | | 08:28 | The true bottlenecks in healthcare: clinical validation and deployment | | 09:40 | Importance of investing in delivery infrastructure and data sharing | | 10:53 | Public trust as an investment risk factor |

---

Summary Takeaways

• The AI market rally continues, led by semiconductors, but underpinned by surprisingly weak consumer sentiment.
• Central banks face tough tradeoffs between inflationary pressures and political demands.
• Geopolitical developments in the Middle East remain a swing factor for energy and risk markets.
• In healthcare, there’s a strategic pivot from breakthrough single cures to resilient, adaptable platforms and system-wide surveillance tools.
• AI’s transformative impact in drug discovery is real but incomplete, as clinical deployment remains a bottleneck.
• The biggest investment opportunities may lie in improving healthcare delivery systems—data, logistics, last-mile access—where adoption is more predictable.
• Public trust is increasingly a measurable investment risk that determines the real-world impact of any medical innovation.

---

This summary covers the substantive content and does not address the podcast’s legal disclaimers or promotional sections.

Transcript

[A]

Welcome to the Moving Markets podcast on Tuesday 26th May, with me, Bernadette and Deco. Joining me this morning to bring us the latest news in financial markets is my colleague Mike Rauber. And then I'm delighted to welcome next generation research analyst Dr. Damian Ng to the show. We talked a few weeks ago about how the hantavirus outbreak demonstrated the extent to which technology plays a vital role in containing that space spread of that virus. And today we're turning our attention to the current Ebola outbreak in Africa and looking at why that creates a compelling case for investing in health systems. But first, let's look at the market headlines from the last 24 hours. Good morning to you, Mike.

[B]

Good morning, Bernadette.

[A]

In fact, I think we'll go beyond the last 24 hours, Mike, given that the US and much of Europe was closed yesterday. But last week The S&P 500 extended gains by nearly 1%. Nvidia also beat on earnings. But it was really semiconductor stock stocks that did the heavy lifting in terms of performance, wasn't it?

[B]

Absolutely. And actually the bank of America fund manager survey Bernadette showed that long global semiconductors to play artificial intelligence is the most crowded trade right now. But it was not only about AI optimism last week, but also weak consumer confidence. The Michigan Consumer Sentiment Index released on Friday fell to a record low due to higher gasoline prices and a standoff in the Middle East. Sentiment among Republicans dropped to 84.6. Now that's the lowest under the current Trump administration.

[A]

And what about Europe last week, Mike?

[B]

The Stoxx EU 600 rose 3% last week even as the ECB cut its 2026 growth forecast. Italy's FTSE MIB Equity Index broke above its 2000 closing high on Friday. And another historic milestone in Italy. Ferrari unveiled its first fully electric five seat model priced at €550,000, a clear break from its combustion engine heritage.

[A]

Okay, so US Up, Europe up. What was Asian performance like last week?

[B]

Japan rebounded with the Nikkei up over 3%. Softer inflation weakened the yen while China edged lower. Emerging markets rose more than 1% on the week. Notably, Bernadette, I saw that information technology at 39% of the MSCI Emerging Markets index is now higher than in the S&P 500.

[A]

Okay. And going back to the U.S. mike, on Friday, obviously Kevin Walsh was sworn in as the new Chairman of the U.S. federal Reserve.

[B]

Absolutely. And President Trump expressed support for Fed independence at the swearing in ceremony, but then argued inflation is temporary and and called for lower rates to support growth Separately, Fed Governor Waller highlighted inflation as the main driver of policy, pushing markets to price in a 25 basis points rate hike this year. Now, this leaves the new Fed chair in a difficult spot between political pressure and inflation risks.

[A]

Yes, and over the long weekend, hope for a Middle east ceasefire increased with Iran's top negotiator and foreign minister in Doha on Monday for talks with Qatar's prime minister. But. But talks have hit some turbulence overnight, right?

[B]

Yeah, one can say so. The US Military carried out limited strikes in southern Iran yesterday evening, targeting missile launch sites and boats reportedly placing mines in the Strait of Hormuz. Brent crude dropped more than 7% on the peace talks yesterday, but it is up 2% in Asia to $98 per barrel. So still below $100 per barrel, which is just seen as an important psychological level. Gold is giving back some of yesterday's gains, down nearly 1% to $3,551 per ounce. U.S. treasury cash trading was closed for Memorial Day, so yesterday Monday, but bonds are rallying in Asia on Peace Talk News with yields sharply lower.

[A]

And how are Asian markets performing against this backdrop?

[B]

Asia was mostly open on Monday rising 1.3%, but today it is flat. South Korea is up nearly 3%. Hong Kong lags due to weakness in consumer technology, including Alibaba and Tencent. But Chinese semiconductor stocks are rising sharply on optimism about a potential UA technology breakthrough that could improve future AI chips, though it remains in an early stage. In Japan, equities are flat. The focus this week is Wednesday's 40 year JGB auction, expected to yield around 4% and seen as a key test amid the fiscal concerns.

[A]

Okay, what else are we expecting this week?

[B]

Quad ministers meet in New Delhi on the Indo Pacific and the Middle east ahead of the Shangri La dialogue in Singapore, bringing a strong focus on defense and security. In Asia this week, earnings are slowing, but we'll highlight enterprise spending trends with Salesforce, Dell and Marvell reporting key data releases. Thursday's US April PC. Now that's the Fed's preferred inflation indicator. Europe and Asia will see inflation and GDP releases. And today we have the US ADP Jobs and Conference Board sentiment indicators and expectations for markets. Mike, It's a shortened trading week as we know, so Europe is losing momentum after the strikes in Iran. When I last looked, The Euro Stoxx 50 looked to open around 0.3% higher, but the S&P 500 is seen about 0.6% higher.

[A]

Great. Thank you very much for the news update this morning.

[B]

Mike, thank you very much for having me, Bernadette.

[A]

And now it's time to talk to Damien. Good morning to you.

[B]

Hi.

[C]

Good morning, Benedet.

[A]

So, Damien, Ebola is showing how quickly, even well understood diseases can escalate when detection is delayed. Does that shift the investment focus from breakthrough treatments towards early surveillance and then diagnostics and prevention systems?

[C]

But first of all, Able highlights that even well characterized pathogens can escalate rapidly when detection and response lag. This does shift the investment lens not away from therapeutics, but toward a more balanced deck that includes surveillance and rapid diagnostics. Early detection definitely helps shorten response cycle and limits systemic disruption, ultimately improving both health and financial outcomes. So for the investors, this means valuing data pipelines and testing capacity as core assets rather than as secondary supporting tools. Importantly, these areas tend to be more resilient across disease categories, offering diversification benefits compared with single drug assets. The result is a broader, more system oriented approach to health security investing.

[A]

And with diseases like cantavirus emerging from environmental and behavioural changes, how should investors think about adaptability in biotech? I mean, are platform based approaches better suited than single disease solutions?

[C]

Right. You know, diseases driven by the environment and human behavior. They highlight the need for adaptability rather than precision around a single pathogen. Platform based approaches, rather than vaccines or diagnostics are structurally better suited because they allow rapid reconfiguration as new threats emerge. So this adaptability reduces development timelines and spreads arrest across multiple indications. In contrast, single disease solutions can deliver strong results, but are inherently exposed to epidemiological uncertainty and shifting relevance. Investors should therefore assess how modular and scalable a technology is and whether it can pivot across disease categories. The long term advantage lies in flexibility, that is the ability. Ability to respond not just to known threats, but to evolving and unforeseen ones.

[A]

And artificial intelligence is attracting significant capital in drug discovery. Do you see the main value creation happening at the discovery stage? Or are the real bottlenecks still in clinical development and regulation and deployment?

[C]

Excellent question. Benedet. AI is definitely speeding up early stage discovery by improving target identification and failure prediction. But the primary constraints on value creations, they reside downstream, that is in clinical validation and real world deployment. These stages remain time intensive and highly uncertain, regardless of how efficient discovery becomes. As a result, AI's impact is significant but partial. It compresses early timelines without fully resolving the structural bottlenecks of the system. So investors should therefore avoid over concentrating on discovery alone and instead consider integrated models that address translation into clinical and commercial settings. The greatest value may emerge where AI intersects with trial design and evidence generation.

[A]

There seems to be though, a growing gap between technological capability and real world healthcare delivery. Does this suggest greater investment opportunities in health system infrastructure and data sharing and distribution rather than frontier science alone?

[C]

Well, you know, the widening gap between technological capability and real world delivery signals a major reallocation opportunity. We can actually say that Benedict scientific breakthrough can often struggle to translate into population level impact due to fragmented infrastructure and uneven distribution. This creates a compelling case for investing in health systems such as data sharing frameworks, logistics, digital platforms and last mile delivery. So these areas may lack the visibility of frontier signs, but can be equally critical. Unlocking value so from an investment perspective, there are more predictable adoption curves and scalable economics. Ultimately, innovation is only as valuable as its reach, and closing the delivery gap is central to capturing that value.

[A]

Okay, finally then, given rising distrust in institutions and the politicization of science, how important is public trust as a factor in determining the success of these new health technologies? And how should investors factor that into their risk assessment?

[C]

Good question again, actually. Well, you know, when it comes to public trust, it is increasingly a determining factor factor in whether new health technologies succeed. Scientific efficacy alone is no longer sufficient. Adoption depends on perception, communication and institutional credibility. So rising polarization and misinformation, as you mentioned earlier, can definitely slow uptake, ultimately distorting demand. So if investors this elevates trust from a soft concentration to to a material risk variable. It affects timelines, market size and ultimately returns. So assessing this requires looking beyond the technology to the surrounding ecosystem, such as transparency and alignment with public concerns. So organizations that proactively build trust and communicate clearly are more likely to convert innovation into sustained real world adoption.

[A]

Thank you Damien. Fascinating and developing theme. Very much appreciate your insights. I'm sure we're going to be following up on this again in the coming months. Thanks for joining us today.

[C]

Thank you very much Bernadette, for the invite.

[A]

Well, that concludes today's podcast. I'd like to say thanks again to Mike and Damien for joining me today and to you for listening. Please do tune in again tomorrow to catch up on what's moving markets and meanwhile, I already mentioned it on Friday. For those of you with an interest in currencies, please check out our latest View beyond podcast that went live over the weekend. It's called From Petrodollars to a New World Order. My colleague Jan Bopp is joined by Julius Baer's currency strategist, Dave Meyer, and Norbert Rooker, head of Macro and Next Generation Research, to explore the origins and evolutions of the petrodollar system, the impact of the US Shale oil revolution, and the practicalities of de dollarization. Meanwhile, good luck to today and goodbye for now.

[D]

The information and opinions expressed in this podcast constitute marketing material and are not the result of independent financial or investment research. Please refer to www.juliusbear.com legal podcasts for further other important legal information.