“Plus ça change, plus c’est la même chose.” / “The more things change, the more they stay the same.” (Jean-Baptiste Alphonse Karr, 1849)
It’s rare for the news cycle to be as eventful as it has been this year, yet matter so little in determining where asset prices actually end up. Since the start of the year, investors have lived through a war that has reignited and a ceasefire that has collapsed more than once. The result? Maximum drama and minimal lasting market impact.
Headline risk is at its highest levels in decades. Yet if you look at where the S&P 500, global equities, and world growth forecasts actually stand today, the picture looks strikingly familiar to how it did months ago.
The ceasefire that wasn’t (and the rally that was)
The US-Iran conflict has swung between war and truce all year. By mid-July, Washington and Iran had declared the ceasefire over. And yet US equities have barely moved off course, instead continuing to toy with record highs. The pattern is becoming as familiar as Groundhog Day:
- A crisis erupts and dominates the headlines.
- Markets dip briefly, then decide the worst-case scenario is unlikely to be priced in for any meaningful period.
- The situation deteriorates on the ground, but by then, positioning has already moved on.
The IMF’s “crosscurrents”: War shock meets AI tailwind
The IMF’s July World Economic Outlook Update captured these tensions in its title alone: “Global Economy in Crosscurrents of War and Technology.” The Outlook projected global growth at 3.0% for 2026 and 3.4% for 2027, broadly unchanged, on a cumulative basis, from April’s forecast, despite months of conflict headlines since then. It highlighted the following global drivers:
- The war shock, which is weighing on energy importers.
- AI-driven demand, which is lifting AI-driven economies.
In essence, these two forces are roughly cancelling each other out. For now.
Why the destination hasn’t changed
US corporate earnings, particularly in technology and AI infrastructure, are reducing portfolio risk. The S&P 500 closed at 7 572 in mid-July, within striking distance of its 2026 highs.
Meanwhile, in South Africa, investors experienced a familiar mix of outcomes and risks. The FTSE/JSE All Share Index closed at 109 683 on 22 July, down modestly over the past month but still 9.49% higher than a year ago. The domestic policy backdrop is itself a study in “plus ça change”, with the SARB holding its repo rate at 7% after May’s pre-emptive hike, despite the upside surprise in June inflation, which came in at 5.0%.
What to do while the headlines spin
The temptation is to trade every headline. However, history suggests a steadier approach:
- Separate headline risk from fundamental risk and remain anchored to earnings quality.
- Respect the AI-versus-war crosscurrent within the IMF’s macroeconomic lens.
- Watch both the rand and oil prices, as they inform the direction of local returns.
None of this warrants complacency, with investment portfolios still vulnerable to a genuine escalation or disintegration in the positive AI capex cycle. But for now, expect more of the same if fundamentals remain intact.
*All facts and figures accurate at time of writing.
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