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Likewise Group plc (LSE:LIKE) has strengthened its UK distribution infrastructure with the £9.57 million acquisition of a 60,000-square-foot high-bay facility in Corby, East Midlands. The site will provide additional storage, cutting and trunking capacity for the flooring distributor, with the installation of racking and cutting equipment starting immediately ahead of a planned operational launch in January 2027.

Corby Facility Supports Expansion Plans

The company views the new Corby hub as an important part of its longer-term growth strategy. The additional capacity is expected to ease pressure on its Birmingham operations while complementing recent developments in Derby and Newport.

Likewise is targeting further expansion across its distribution network as it works towards an aspirational sales revenue goal of £300 million. The company said positive trading momentum has continued through August as it approaches the seasonally busier autumn period.

Management is also assessing further property investments aimed at improving logistics and material-handling capabilities. Additional announcements relating to potential investments are expected over the coming months.

Financial and Technical Outlook

Likewise’s outlook is supported by improving cash generation alongside constructive technical indicators. The share price is trading above key moving averages, while the MACD remains positive, pointing to favourable underlying momentum.

However, valuation remains a significant consideration, with the company’s exceptionally high price-to-earnings ratio potentially limiting upside. Financial performance is also constrained by narrow operating and net margins, while revenue growth has shown signs of slowing.

More About Likewise Group Plc

Likewise Group plc is a UK flooring distributor supplying a range of floorcoverings through an integrated national logistics network. Its operations include major distribution hubs and regional facilities that provide the storage, cutting and transportation infrastructure required to serve customers throughout the UK.

The disruption to global oil supplies caused by the U.S.-Iran conflict and the blockage of the Strait of Hormuz is producing sizeable inventory declines, although Citi believes worldwide stockpiles could continue providing substantial cover for several more years.

Citi analysts estimate that observed global oil inventories fell by approximately 519 million barrels between February and August 2026, equivalent to an average draw of roughly 3 million barrels per day.

Extending that rate of depletion into the future suggests OECD inventories could decline to around 70 days of cover by the end of 2027. Stocks excluding China could reach the same level by approximately mid-2028, while global inventories would not fall to 70 days until the first quarter of 2029.

Citi highlighted 70 days of supply as an important historical threshold. Global inventories reached similar levels during the second oil shock of the 1970s and 1980s, when energy costs rose to approximately 8% of economic output.

Applying an equivalent energy burden to today’s economy would imply all-in oil prices exceeding $200 per barrel, according to the bank, considerably higher than the current level of approximately $120.

The headline inventory figures may nevertheless understate the risks emerging in specific parts of the market.

“Specific refined products (especially diesel) are already facing distress now, which could worsen further, meaning more localized, product-specific crises earlier than these projections would suggest,” Citi wrote.

Crude prices have already responded to fading expectations for a rapid diplomatic resolution. Brent has risen from around $80 per barrel at its early-August low to more than $93, while WTI has climbed from approximately $75 to above $86.

Conditions in refined products are even more extreme. U.S. wholesale diesel has risen to a premium of more than $100 per barrel over WTI, while the weighted refinery margin has increased by around 350% since the beginning of the year to $33.

Citi therefore sees the possibility of individual fuel markets encountering severe shortages well before aggregate global oil inventories reach historically critical levels.

The bank’s central forecast remains considerably less severe. Citi continues to expect an agreement that allows the Strait of Hormuz to reopen during the fourth quarter, which would ease supply pressures and help push Brent crude back into the $60s during 2027.

Fund managers have become increasingly confident about markets and the global economy, with Bank of America’s August survey showing bullish sentiment at its third-strongest level since 2022 and cash holdings approaching the bottom of their historical range.

Cash allocations declined another 0.1 percentage point during August to 3.5% of assets under management, placing them at the sixth-lowest level recorded since BofA launched the survey in 1998.

That leaves the bank’s Global FMS Cash Rule firmly on “sell,” with the contrarian indicator triggered whenever cash holdings stand at 4.0% or less.

Investors have simultaneously increased their exposure to stocks. Global equity allocations reached a net 56% overweight, their highest since November 2021, extending the period in which fund managers have been overweight equities to 14 straight months.

Expectations for the global economy have become particularly optimistic. A record 56% of respondents believe the economy will experience “no landing”, while 43% anticipate a “boom”, the highest reading for that outcome since February 2022.

“Consensus conviction is no macro landing, no Fed hike, no AI capex cut, no DEM sweep, no bears,” BofA strategists led by Michael Hartnett said in a note.

“Positioning continues to recommend investors retreat or rotate within risk assets rather than reload,” they added.

Expectations for another Federal Reserve interest rate increase have also diminished. The survey found that 72% of fund managers do not anticipate a rate hike before November’s midterm elections, with the proportion increasing from the previous month.

Attention is now turning towards Fed Chair Kevin Warsh’s appearance at Jackson Hole. Some 53% of respondents expect a neutral message, compared with 31% forecasting a hawkish tone and 7% anticipating a dovish approach.

Artificial intelligence remains central to both investor optimism and concerns. Long global semiconductor stocks continues to rank as the most crowded trade, although the proportion identifying it as such dropped sharply to 53% from 82% in July.

An AI bubble was identified as the largest tail risk by 32% of respondents. Separately, 38% said hyperscaler AI capital expenditure was the most likely potential source of a systemic credit event.

Even so, investors largely expect the spending boom to continue. Around 71% believe no hyperscaler will reduce capital expenditure during the current year, while 58% expect AI-related disruption to labour markets to remain limited until at least 2028.

August also produced a shift in sector positioning. Fund managers increased exposure to technology, banking and energy while reducing allocations to industrials and healthcare. U.S. equities moved to a net 27% overweight, their strongest position since December 2024, while emerging markets also attracted greater allocations.

Gold is increasingly viewed as inexpensive, with a net 16% of respondents describing the metal as undervalued, the highest proportion since March 2023.

With consensus positioning already heavily bullish, BofA’s contrarian ideas for August point in the opposite direction. The trades include buying bonds while shorting commodities, favouring Consumer Staples over Technology, buying Consumer Discretionary while shorting banks, and taking a long position in U.K. equities against a short position in U.S. stocks.

Bank of America’s Michael Hartnett continues to favour gold as a hedge against U.S. dollar weakness, with the latest fund flow figures showing investors putting the largest amount of money into the precious metal since January.

Gold funds collected $6.3 billion over the latest week, their strongest inflow since January 2026, according to BofA. The broader flow picture was also positive, with cash attracting $25.4 billion, bonds receiving $23.8 billion and equities drawing $16.1 billion.

The gold call forms part of Hartnett’s “Anything But Dollar” theme, which centres on positioning for risks associated with erosion in the value of the U.S. currency and other potential stresses across financial markets.

Hartnett wrote that the “trade is long gold…still best hedge against dollar debasement, bond collapse, asset inflation, capitalist populism vs socialist populism politics of 2020s.”

BofA also sees implications for emerging markets from the theme. It identified Brazil’s October 4 election as an event that could influence the direction of regional assets, noting that Latin American markets have recently responded favourably to governments perceived by investors as more business-friendly.

The bank said right-wing or right-leaning candidates have won all seven presidential elections held since January 2025.

Beyond gold, investment-grade bonds registered $10.6 billion of inflows, their highest level in five weeks. European equity funds attracted another $1.2 billion, representing their strongest result since February.

Flows were considerably weaker elsewhere. Investors withdrew $14.5 billion from Chinese equities, the biggest weekly outflow since May, while technology funds suffered $1.2 billion in withdrawals.

Bank of America’s Bull & Bear Indicator moved down to 9.3 from 9.7 as high-yield flows weakened and investors pulled money from technology and healthcare. Even after the decline, positioning remains “excessively bullish,” according to the bank.

BofA cautioned that “‘greed’ is always more difficult to reverse than ‘fear’,” while noting that the end of a bull market generally requires several conditions to come together. These include excessive positioning, elevated optimism surrounding corporate profits and a tightening of policy.

Investors may be placing too much confidence in a combination of resilient economic growth, contained inflation risks and manageable supply disruptions, according to Deutsche Bank, which believes today’s market backdrop is unlikely to remain in equilibrium indefinitely.

Macro strategist Henry Allen said global equities are trading at record levels while expectations across rates markets suggest central banks have almost finished raising interest rates. Commodity pricing, meanwhile, indicates investors are largely assuming that existing supply disruptions will remain contained.

“This goldilocks window isn’t a sustainable equilibrium,” he wrote, adding that markets are “pricing a near-immaculate scenario where basically everything goes right.”

Deutsche Bank sees two broad ways in which that optimistic backdrop could unravel. The first involves economic growth remaining stronger than expected while increasingly loose financial conditions make central banks more concerned about inflation.

Bloomberg’s measure of U.S. financial conditions recently reached its most accommodative point since 1996, according to the bank. That easing comes while headline and underlying inflation rates remain above target across many of the world’s major economies.

Such a combination could force policymakers to tighten monetary policy more aggressively than investors currently expect. Markets are pricing just one Federal Reserve rate increase, but Deutsche Bank noted that historically, tightening cycles have rarely consisted of a single hike followed by no further action.

The second possibility is that growth weakens. In that scenario, the economic resilience currently helping to sustain elevated risk-asset valuations would begin to disappear.

Allen stressed that an outright recession would not necessarily be required to produce meaningful market declines. Deutsche Bank cited the 2015-16 corrections and the 2022 bear market as examples of episodes in which economic slowdowns were enough to force investors to reassess asset prices.

Commodity markets could add another layer of risk. Oil remains below its recent peaks and futures prices decline further along the curve even though the Strait of Hormuz remains blocked.

Deutsche Bank believes another significant supply disruption could therefore present a particularly difficult outcome for investors. Such a shock could simultaneously undermine equities and bonds, leaving markets exposed after pricing in an economic environment where relatively little is expected to go wrong.

Artificial intelligence investment is accelerating rapidly across corporate America, but Goldman Sachs says the technology has yet to produce a clearly measurable earnings advantage for most S&P 500 companies.

The latest earnings season was nevertheless strong. S&P 500 earnings per share advanced 31% year-over-year in the second quarter after stripping out exceptional income associated with private investment stakes. AI infrastructure companies, including hyperscalers, contributed around half of that growth as their combined earnings increased 54% from the previous year.

Corporate profit growth was also relatively broad. Once the energy sector and its benefit from higher oil prices are removed, the median company in the S&P 500 still generated a 14% year-over-year increase in earnings.

The disconnect, according to Goldman strategists led by Ben Snider, is that companies are still struggling to demonstrate how deploying AI is feeding through to their bottom lines. Only 11% of S&P 500 businesses provided quantified productivity improvements for individual AI use cases during their latest earnings calls, including areas such as coding and customer service.

An even smaller 2% of companies quantified AI’s direct effect on earnings, leaving that proportion unchanged from the first quarter.

“Q2 results showed a small and statistically insignificant difference in earnings growth between the companies quantifying AI productivity gains this quarter and other S&P 500 companies,” the strategists wrote.

The potential for a more visible earnings contribution is increasing, however, as businesses rapidly expand their AI budgets. According to the Ramp AI Index, median monthly AI spending per employee more than doubled from $5 in January to $12 in July. The increase has been much greater among the highest-spending companies, with businesses in the top decile lifting monthly expenditure from $240 to $650 per employee over the same period.

For now, those costs remain manageable relative to corporate revenues. Goldman estimates AI inference spending amounts to less than 0.5% of S&P 500 sales. Its IT Spending Survey also indicates that roughly two-thirds of businesses are funding AI initiatives by redirecting money already allocated elsewhere.

Software budgets are the most common source of those funds, accounting for 18% of reallocations, while labour represents 11%.

That shift has not yet translated into widespread pressure on the software industry. Although individual companies such as Starbucks are developing internal AI products capable of replacing external software, broader software revenue growth has strengthened modestly over recent quarters. Software stocks have also rebounded after previously coming under pressure.

For investors, Goldman says the uncertain distribution of AI’s eventual financial benefits is influencing market positioning. AI infrastructure businesses offering clear and immediate earnings growth have attracted investor demand, while the market has been less willing to make aggressive bets on which companies will ultimately convert AI-driven productivity improvements into lasting earnings growth.

U.S. equities could face a more unsettled backdrop as the next midterm election cycle approaches, with RBC Capital Markets looking to 2018 and 2022 for clues about how markets have historically behaved during comparable periods.

The second halves of both midterm years were volatile, differing sharply from the upward moves recorded during the two most recent presidential election years. In both 2018 and 2022, the S&P 500 established an early-autumn peak in August or September, declined to an October low, recovered to another high in November and then fell to a further low in December.

RBC strategist Lori Calvasina noted that while those market swings were sizeable, they ultimately played a role in creating more sustainable lows that extended into the following year. Political uncertainty was not the only driver. Federal Reserve policy and interest rates were important considerations during both episodes, while trade policy created additional pressure in 2018. In 2022, investors were also dealing with weakening technology earnings and the Russia-Ukraine war.

There were notable similarities at the sector level. Consumer Staples and Health Care proved relatively resilient during the declines in both periods, while Technology and Consumer Discretionary underperformed. Leadership shifted during the subsequent recoveries, when Financials, Industrials and Materials performed strongly and Communication Services, Consumer Staples and Health Care trailed.

“To be clear, we are not calling for this kind of turbulence in the months ahead, but we did find the exercise useful for thinking through tail risks, particularly regarding the timing of inflections,” Calvasina wrote.

Separate factor analysis from RBC suggests high price momentum has recently regained strength across both the S&P 500 and Russell 2000, while EPS quality has fallen behind. Second-quarter corporate earnings calls also painted a mixed picture of the operating environment. Businesses highlighted challenges including geopolitical tensions, persistent inflation, supply-chain disruption and weak housing turnover, while reporting healthier conditions in areas exposed to AI, energy investment and reshoring.

Deal activity provides another potentially supportive indicator. RBC found that equities have generally continued moving higher while transaction counts remain strong, with market difficulties tending to emerge only after dealmaking activity loses momentum.

Valuations, meanwhile, do not appear to be at the extremes of their recent ranges. According to Calvasina, forward P/E ratios for both the S&P 500 and Nasdaq 100 are around the midpoint of their post-COVID ranges. The biggest S&P 500 companies show a similar valuation pattern, while the Russell 2000 is trading at approximately its average forward earnings multiple.

RBC remains constructive on the outlook for the S&P 500 over the coming year, with interest rates identified as the main threat to that stance. Calvasina expects corrections to be limited to roughly 5% to 10% unless recession concerns intensify or markets experience an interest rate shock. Within its broader positioning, RBC currently sees a slight advantage for Growth over Value and for U.S. equities over international markets.

UBS has raised its outlook for Eurozone corporate earnings in 2026 after second-quarter results showed stronger and more widespread profit growth across the region.

The bank now expects earnings for the EuroStoxx 50 to increase by around 15% this year, up from its previous forecast of 8%. For broader Eurozone indices, the estimate was raised from 11% to approximately 15%. UBS maintained its 2027 earnings growth forecast at 15%.

Second-quarter earnings growth accelerates

With most companies having now reported, Eurozone earnings are growing by approximately 22% year on year, according to UBS. Excluding the energy sector, growth is running at around 11%.

That compares with overall earnings growth of approximately 12% during the first quarter, indicating that corporate profitability gained momentum as the year progressed.

Cost discipline continues to support margins, but UBS expects revenue growth to play an increasingly important role as manufacturing conditions improve, currency-related pressures ease and companies benefit from stronger operating leverage.

Profit growth spreads across European sectors

The earnings recovery is becoming increasingly broad, with UBS forecasting profit growth across every sector this year.

Financial companies are experiencing renewed momentum as demand for loans improves and capital markets activity strengthens. Industrials are benefiting from investment linked to artificial intelligence, electrification and defence, alongside improving cyclical conditions in areas including automation.

The combination suggests the Eurozone earnings recovery is no longer concentrated in a small number of industries, providing a potentially stronger foundation for the regional equity market.

UBS upgrades European technology sector

UBS also upgraded European information technology to Attractive following the sector’s recent market correction.

The bank said valuations are no longer excessively stretched, while renewed earnings momentum offers additional support. Rising expectations for AI-related semiconductor capital expenditure are also improving the outlook for European technology companies.

Analyst sentiment has strengthened more broadly. UBS said the breadth of earnings estimate revisions has reached its strongest level in three years.

Meanwhile, global manufacturing PMIs have recovered into the low-to-mid 50s, levels which have historically been associated with the end of corporate earnings downgrade cycles.

Banks and industrials among UBS preferred sectors

UBS maintained its Attractive stance on European equities, with a particular preference for the Eurozone.

The bank favours banks, industrials, consumer discretionary companies, healthcare and information technology, while also highlighting Germany as an attractive market.

Germany’s fiscal support is expected to provide an additional tailwind as increased spending feeds through to economic activity and corporate earnings.

With profit growth accelerating, analyst revisions improving and the earnings recovery spreading across sectors, UBS sees a stronger fundamental backdrop for Eurozone equities heading through the remainder of 2026 and into 2027.