Rainer Michael Preiss – Global Markets Commentary
The U.S. midterm elections of November 2026 provide an important opportunity for global investors to reconsider portfolio positioning. While political developments in Washington attract considerable attention, the more relevant question for private clients is how changing expectations surrounding fiscal policy, regulation, interest rates and international capital flows may influence investment returns.
Financial markets are forward-looking. They respond not simply to election results but to expectations about future policies, corporate profitability and economic conditions. Political developments can therefore accelerate investment rotations that were already underway, even when the longer-term economic outlook remains largely unchanged.
For private clients, five potential rotations deserve particular attention: the evolution of artificial intelligence investing, renewed interest in healthcare and clean energy, changing fiscal and geopolitical expectations, opportunities arising from lower Treasury yields, and the possibility of a weaker U.S. dollar supporting international diversification.
These developments should not be interpreted as guaranteed outcomes. Rather, they offer a framework for understanding where investment leadership could shift and how globally diversified portfolios might respond.
Artificial Intelligence: From Infrastructure Expansion to Sustainable Earnings
Artificial intelligence has dominated financial markets in recent years. Semiconductor manufacturers, data-centre operators, electricity infrastructure providers and companies supplying the computing power necessary for AI development have attracted substantial investor interest.
However, the investment narrative is evolving. The central question is increasingly shifting from how much companies spend on AI infrastructure to how effectively those investments generate revenues, productivity improvements and sustainable free cash flow.
The initial phase rewarded businesses supplying the infrastructure required for AI development. The next phase may favour companies capable of monetising that infrastructure through established customer relationships, scalable applications and profitable business models.
This distinction could benefit major hyperscalers such as Microsoft, Alphabet and Amazon, whose diversified operations and financial resources provide greater flexibility. Nevertheless, even these companies must demonstrate that substantial capital expenditure produces acceptable returns on invested capital.
Chinese technology companies also deserve attention. Businesses such as Alibaba and Tencent offer exposure to AI development, established digital ecosystems and potentially attractive valuations relative to American technology leaders.
Yet regulatory uncertainty, geopolitical tensions and corporate governance remain important considerations.
For private clients, the lesson is not to abandon semiconductor investments or AI infrastructure. Rather, it is to recognize that technological leadership and investment returns are not necessarily identical. Valuations, profitability and capital discipline will become increasingly important as the AI investment cycle matures.
Policy Rotation: Healthcare and Clean Energy Could Regain Favour
The second potential rotation concerns sectors whose investment prospects are particularly sensitive to government policy.
Healthcare and clean energy have experienced periods of uncertainty arising from regulatory changes, government spending priorities and political disagreements. Changes in the congressional balance of power could encourage investors to reassess these sectors.
Healthcare offers an interesting combination of defensive characteristics and structural growth opportunities. Ageing populations, advances in medical technology and increasing demand for healthcare services provide long-term support for selected pharmaceutical companies, medical-device manufacturers and healthcare providers.
However, changes in pharmaceutical pricing, insurance regulation and public healthcare expenditure could produce very different outcomes across individual businesses.
Clean energy represents another potential beneficiary of changing policy expectations. Renewable electricity generation, energy storage, transmission infrastructure and energy-efficiency technologies could attract renewed attention if legislative priorities become more supportive.
Nevertheless, congressional influence does not automatically translate into new legislation or additional subsidies. Presidential powers, budget negotiations and existing regulatory frameworks remain important constraints.
Investors should also distinguish between businesses benefiting from temporary political enthusiasm and those possessing sustainable competitive advantages.
For private clients, healthcare may offer opportunities for defensive diversification, while clean energy provides exposure to longer-term structural changes in electricity demand and infrastructure investment. Both sectors require careful attention to valuations, financing costs and profitability.
Fiscal and Geopolitical Rotation: Defense, Oil and Consumer Opportunities
The third potential rotation involves government expenditure, geopolitical developments and energy markets.
Defense companies have benefited from rising international tensions, increased military procurement and renewed national-security priorities. However, expectations of greater fiscal restraint or more extensive congressional scrutiny could challenge valuations that already incorporate substantial future defense spending.
This does not imply that global defense expenditure will necessarily decline. European security requirements, Asian geopolitical tensions and long-term procurement commitments continue to support military investment.
Nevertheless, financial markets frequently respond to changes in the expected growth rate of government spending rather than to absolute spending levels.
Energy prices represent another important variable.
A sustained decline in oil prices, particularly if driven by improved supply conditions or reduced geopolitical tensions, could benefit airlines, tourism operators, transportation companies and consumers.
For airlines, lower fuel expenses can materially improve operating margins, although competition, currency movements and fuel hedging also influence profitability.
For households, lower energy costs can improve disposable income and support spending on travel, leisure, hospitality and other discretionary activities.
However, the underlying reason for declining oil prices matters. Lower prices resulting from increased supply or reduced geopolitical risks would generally be more constructive than a decline caused by weakening global demand.
For investors, the opportunity lies in identifying businesses that benefit from lower input costs while maintaining resilient customer demand and healthy balance sheets.
Treasury Yields: Opportunities in Property, Utilities and Gold Miners
The fourth rotation concerns U.S. Treasury yields and their influence on global asset valuations.
Lower government bond yields can improve the relative attractiveness of income-generating assets and companies with predictable long-term cash flows. They may also reduce financing costs and support valuations through lower discount rates.
Real estate investment trusts and selected property companies could benefit from such an environment. However, investors must distinguish between different property segments. Residential, logistics, retail, office and data-center properties face very different structural and financial conditions.
Utilities represent another potential beneficiary. Their relatively stable earnings and dividend distributions can become more attractive when bond yields decline. At the same time, substantial infrastructure investment requirements and regulatory constraints demand careful financial analysis.
Gold and gold-mining companies could also attract greater interest.
Lower real interest rates reduce the opportunity cost of holding gold, while concerns surrounding fiscal sustainability and monetary credibility may reinforce demand for precious metals as portfolio diversifiers.
Gold-mining equities provide additional exposure to movements in the gold price but introduce operational, political and management risks that do not apply in the same way to physical gold.
Importantly, lower Treasury yields are not automatically positive for equities. If yields decline because economic growth is deteriorating sharply, weaker corporate earnings may offset the benefits of lower discount rates.
Private clients should therefore evaluate interest-rate-sensitive investments within the broader economic context rather than relying on bond yields alone.
The U.S. Dollar: International Equities and Emerging Markets Return to Focus
The fifth potential rotation may have particularly significant implications for global asset allocation.
American equities have enjoyed an extended period of exceptional investor interest, supported by technology leadership, strong corporate profitability and the depth of U.S. capital markets.
Consequently, many global portfolios have become increasingly concentrated in American equities and the U.S. dollar, often without investors fully appreciating the resulting exposure.
A sustained weakening of the dollar could encourage renewed interest in international diversification.
For dollar-based investors, appreciation of foreign currencies can enhance returns from overseas investments. Emerging markets may also benefit from reduced pressure on dollar-denominated debt, improving financial conditions and renewed international capital inflows.
Asian markets, including China, South Korea, Taiwan and selected Southeast Asian economies, offer exposure to technology, manufacturing and domestic consumption beyond the United States.
Latin American markets such as Brazil, Mexico and Chile could benefit from attractive valuations, domestic monetary developments and selected commodity-related opportunities.
Frontier markets in Africa and Central Asia may also warrant consideration for investors with appropriate risk tolerance and longer investment horizons. However, limited liquidity, governance standards, currency convertibility and market access require particular attention.
A weaker dollar alone does not guarantee stronger international equity returns. Domestic economic fundamentals, political stability and corporate earnings remain decisive.
The broader investment lesson is that geographical diversification should also be understood as diversification across currencies, economic structures and valuation cycles.
Portfolio Construction: Diversification Rather Than Market Timing
Taken together, these five potential rotations suggest that the next phase of global financial-market performance could become broader and more differentiated than the concentrated leadership experienced during the AI infrastructure boom.
For private clients, the appropriate response is not necessarily to sell successful American investments or radically restructure portfolios following an election.
Instead, investors should reassess concentration risks, geographical allocations, currency exposure and the balance between growth-oriented and income-generating assets.
Strategic asset allocation should continue to reflect long-term financial objectives, liquidity requirements and risk tolerance. Tactical adjustments may be appropriate where changing valuations or economic conditions create identifiable opportunities.
Political developments can influence markets, but they should not replace disciplined investment analysis.
Conclusion: Investment Leadership Is Never Permanent
The significance of the 2026 U.S. midterm elections extends beyond Washington. They provide a useful occasion to reconsider five important investment themes: AI monetization, policy-sensitive sectors, fiscal and geopolitical developments, Treasury yields and international currency diversification.
The central message for private clients is that investment leadership changes over time. Companies, sectors and countries that dominate one market cycle do not necessarily lead the next.
Successful portfolio construction therefore requires more than identifying attractive investment themes. It requires understanding valuations, managing concentration risks and maintaining exposure to multiple sources of potential returns.
The greatest investment opportunity following the midterm elections may not lie in predicting the next political decision, but in recognizing where the next rotation of global capital could create value.
In an increasingly interconnected and politically complex financial world, disciplined diversification, valuation awareness and long-term investment thinking remain essential.
Rainer Michael Preiss Global Markets Commentary, Partner & Portfolio Strategist DAS Family Office.
Disclaimer: This article reflects the author's views for general information and educational purposes only. It does not constitute investment advice, an offer, or a recommendation to buy or sell any financial instrument. Market conditions, political developments and investment expectations may change without notice. All investments involve risk, including the possible loss of principal. Investors should consider their individual financial circumstances, investment objectives and risk tolerance before making investment decisions.
