Rothschild & Co Wealth Management Research

Rothschild & Co Wealth Management maintains a cautious outlook on the current global economic landscape, noting that while oil prices exceeding $100/pb have elevated headline inflation to 4%, a stagflationary shock remains unlikely due to resilient labor markets and higher interest rates. The firm observes that record-setting US stock valuations, reflected in historic CAPE ratios, are primarily driven by heavy capital expenditure in AI infrastructure. Despite this market momentum, analysts emphasize that profit concentration remains narrow, favoring AI hardware suppliers over broader sectors. A critical theme of their research is the current lack of proven, scalable AI applications for end-users, which poses a long-term risk to sustainability. Consequently, the institution advises a disciplined approach, balancing optimistic growth narratives with the reality of unproven technological utility.