Northern Trust Asset Management
The latest research and outlooks in the ProAllocate library
- Thematics
Seeing Ghosts
Northern Trust argues that despite high concentration, heavy capex and pockets of leverage, AI markets lack the euphoria, oversupply and missing revenues that define true bubbles. It warns that rising rates or tighter data-center regulation remain the biggest risks to this thesis.
- Equities
A Sell-Off Isn’t Evidence of an AI Bubble
Northern Trust argues the Nasdaq sell-off reflects a reset of AI expectations and financing conditions rather than a bubble bursting, favouring cash-rich megacaps over leveraged cloud operators. It advises investors to monitor earnings, cash flow and credit conditions, and review portfolio concentration.
- Macro
U.S. Midterms: Global Energy Markets Are the True Scorecard
Northern Trust Asset Management argues midterm voter anger over fuel inflation puts pressure on the White House to pursue diplomacy ending conflicts in Iran and Ukraine driving energy prices. Markets heavily discount a breakthrough, creating asymmetric upside if peace talks succeed.
- Fixed Income
Fixed Income is Back, But it’s Different
Northern Trust Asset Management argues that higher yields have restored fixed income's income potential, making credit quality more important than yield-chasing given tight spreads. It also contends bonds no longer reliably diversify equity risk, requiring investors to rethink portfolio construction.
- Fixed Income
The AI Soft Landing Scenario
Northern Trust's Peter Wilke argues AI capital-expenditure growth will decelerate from 54% to 12% by 2028, straining high-yield neocloud borrowers while easing memory costs and potentially enabling Federal Reserve rate cuts. Accompanying notes cover orderly money markets, concentrated high-yield distress, stretched US equity valuations versus Treasury yields, and tight diesel markets.
- Fixed Income
The Election Will Make Headlines. Muni Credit Should Hold Steady.
Northern Trust Asset Management argues that despite major midterm election headlines on taxes, Medicaid and state ballot measures, municipal credit quality will remain largely stable given states' strong reserves and controlled liabilities.
- Investment Industry
AI Models Are a Commodity. Turning AI into Investment Outcomes Is the New Challenge.
Northern Trust Asset Management argues that as AI tools become commoditized across the industry, asset managers' competitive advantage will shift from access to AI toward proprietary data, governance and organizational ability to scale successful applications. Investors should evaluate managers on execution capability, not just AI adoption.
- Commodities
Lunch with the Real World
Northern Trust argues that tech firms and governments are stockpiling metals for strategic resilience rather than cyclical demand, while Europe's problem is too little equity investment, not too much debt. It also contends that tightening credit for AI data-center financing may concentrate rather than curb capex.
- Macro
Three Themes That Matter More Than the Midterms
Northern Trust Asset Management argues U.S. midterm elections will have limited market impact compared with Federal Reserve policy, rising bond yields and AI-driven capital spending. Kevin Warsh's rate decisions and AI infrastructure investment are identified as the more decisive forces shaping markets through 2028.