Pictet Trading & Sales Research Hub

Pictet Trading & Sales research indicates a divergent global landscape characterized by deepening cautiousness in US consumer sectors alongside a structural "regime shift" in emerging markets. US consumer confidence has sharply declined to 48.2, weighed down by persistent inflation, high financing costs, and geopolitical tensions such as the Iran-US conflict. While major retailers like Target and Walmart show top-line resilience, soft demand at Home Depot and increasing corporate mentions of high gas prices point toward a fragile outlook for US retail. Despite this underperformance, technical analysis suggests the retail sector (XRT) is approaching major historical support levels that may offer a tactical floor. Conversely, the firm highlights an emerging market rotation driven by AI hardware leaders such as TSMC and SK Hynix, with Taiwan and South Korea now representing 25% and 19% of the index respectively. From a technical perspective, the MSCI EM aggregate has broken a 15-year relative downtrend against the S&P 500, supported by a range-bound US dollar. Analysts maintain an optimistic stance on the EEM-US ETF, identifying upside price targets between 74 and 79 as the region benefits from its concentration of semiconductor leaders.