Chart 1

Real money momentum peaked in February and has led global manufacturing PMI new orders by seven months at the last three turning points, suggesting a PMI peak around now – chart 2.

Chart 2

As previously discussed, global real money momentum has been supported by a pick-up in the US, in contrast to weakness in Europe and Japan. US six-month momentum pulled back in August, although this reflected an unfavourable base effect rather than a soft current-month change. The Eurozone and Japan, meanwhile, moved deeper into contraction – chart 3. (UK data will be released next week.)

Chart 3

Monetary trends support last week’s decisions to hike by the Fed and hold by the BoE but argue that ECB / BoJ tightening has been misguided and will result in unnecessary economic weakness.

Will global real money momentum fall further? Higher rates and the Fed’s suspension of securities purchases suggest slower nominal growth, while energy price strength will drive a near-term rebound in CPI momentum – chart 4.

Chart 4

August industrial output data are still patchy but global six-month momentum is likely to have remained above that of real narrow money, suggesting deficient liquidity for markets – chart 5. Bond markets have so far borne the brunt of this squeeze but a PMI reversal could transfer pressure onto equities.

Chart 5

The post Global money update: August weakness appeared first on Groupe financier Connor, Clark & Lunn ltée.

Chart 1

Real money momentum peaked in February and has led global manufacturing PMI new orders by seven months at the last three turning points, suggesting a PMI peak around now – chart 2.

Chart 2

As previously discussed, global real money momentum has been supported by a pick-up in the US, in contrast to weakness in Europe and Japan. US six-month momentum pulled back in August, although this reflected an unfavourable base effect rather than a soft current-month change. The Eurozone and Japan, meanwhile, moved deeper into contraction – chart 3. (UK data will be released next week.)

Chart 3

Monetary trends support last week’s decisions to hike by the Fed and hold by the BoE but argue that ECB / BoJ tightening has been misguided and will result in unnecessary economic weakness.

Will global real money momentum fall further? Higher rates and the Fed’s suspension of securities purchases suggest slower nominal growth, while energy price strength will drive a near-term rebound in CPI momentum – chart 4.

Chart 4

August industrial output data are still patchy but global six-month momentum is likely to have remained above that of real narrow money, suggesting deficient liquidity for markets – chart 5. Bond markets have so far borne the brunt of this squeeze but a PMI reversal could transfer pressure onto equities.

Chart 5

The post Global money update: August weakness appeared first on Groupe financier Connor, Clark & Lunn ltée.

CC&L Uni est heureuse d’accueillir Maxime Carrier à titre de chef des solutions de placement. Établi à Montréal, Maxime se joint à la société dans le cadre d’un poste nouvellement créé qui témoigne de la croissance continue de nos activités et de notre engagement à aider les investisseurs institutionnels à composer avec des enjeux de placement de plus en plus complexes. Aujourd’hui, l’actif géré de CC&L Uni a dépassé 3,2 milliards de dollars. Aujourd’hui, la société compte parmi ses clients un éventail diversifié d’investisseurs institutionnels, notamment des régimes de retraite, des compagnies d’assurance, des fondations, des régimes de santé et de bien-être ainsi que des fiducies autochtones.

La création du poste de chef des solutions de placement marque une nouvelle étape importante dans notre évolution. Alors que les investisseurs institutionnels doivent composer avec des considérations de plus en plus complexes en matière de portefeuille, de passif et de gouvernance, ce nouveau rôle vise à renforcer notre capacité à offrir des solutions de placement personnalisées qui prennent comme point de départ les objectifs des clients et qui tirent parti du vaste éventail de capacités offertes au sein du Groupe financier Connor, Clark & Lunn.

Dans le cadre de ses fonctions, Maxime dirigera l’élaboration de solutions de placement institutionnelles personnalisées, en étroite collaboration avec les clients, les consultants, notre équipe des ventes institutionnelles et les sociétés de placement affiliées du Groupe. Ses responsabilités engloberont la répartition stratégique de l’actif, la construction de portefeuille, les titres à revenu fixe et les solutions multiclasse de crédit, la gestion actif-passif, l’analyse de scénarios économiques, la gouvernance des placements et la surveillance des risques. Maxime possède une vaste expérience des placements institutionnels, des solutions de titres à revenu fixe et de la gestion actif-passif. Plus récemment, il occupait le poste de gestionnaire de portefeuille principal, Solutions de titres à revenu fixe, chez Fiera Capital. Auparavant, il a occupé des postes de direction chez Gestion de Placements TD.

L’expertise de Maxime renforcera davantage la capacité de CC&L Uni à arrimer les objectifs de ses clients aux capacités de placement offertes par le réseau de sociétés affiliées du Groupe financier CC&L. En combinant une construction de portefeuille personnalisée et une expertise spécialisée dans les marchés publics et privés, nous cherchons à offrir aux investisseurs institutionnels des solutions intégrées qui appuient l’atteinte de leurs objectifs à long terme. Nous sommes ravis d’accueillir Maxime au sein de l’équipe et nous nous réjouissons à l’idée de sa contribution à la croissance continue de CC&L Uni.

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CC&L One is pleased to welcome Maxime Carrier as Head of Investment Solutions. Based in Montréal, Maxime joins the firm in a newly created role that reflects the continued growth of our business and our commitment to helping institutional investors navigate increasingly complex investment challenges. Today, CC&L One has grown to more than $3.2 billion in assets under management and today serves a diverse range of institutional investors, including pension plans, insurance companies, foundations, health and welfare plans and Indigenous trusts.

The creation of the Head of Investment Solutions role marks an important next step in our evolution. As institutional investors face increasingly sophisticated portfolio, liability and governance considerations, the role is designed to strengthen our ability to deliver customized investment solutions that begin with clients’ objectives and draw on the broad range of capabilities available across Connor, Clark & Lunn Financial Group.

In his role, Maxime will lead the development of customized institutional investment solutions, working closely with clients, consultants, our Institutional Sales team and investment affiliates across the firm. His responsibilities will span strategic asset allocation, portfolio construction, fixed income and multi-credit solutions, asset-liability management, economic scenario analysis, investment governance and risk oversight. Maxime brings extensive experience in institutional investing, fixed income solutions and asset-liability management, most recently serving as Senior Portfolio Manager, Fixed Income Solutions at Fiera Capital, and previously holding senior roles at TD Asset Management.

Maxime’s expertise will further enhance CC&L One’s ability to connect clients’ objectives with investment capabilities from across the CC&LFG affiliate network. By combining customized portfolio construction with specialized expertise across public and private markets, we seek to provide institutional investors with integrated solutions that support their long-term objectives. We are excited to welcome Maxime to the team and look forward to the contributions he will make as CC&L One continues to grow.

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TORONTO, Sept. 18, 2026 /CNW/ – Connor, Clark & Lunn Funds Inc. (“CC&L Funds” or the “Manager”) announced today its intention to terminate the CC&L Diversified Income Fund (the “Fund”). The termination is scheduled to take effect on or about November 18, 2026 (the “Termination Date”).

The decision to terminate the Fund was made after careful consideration of various factors and is part of the Manager’s ongoing effort to ensure its product lineup remains aligned with investor preferences and needs and meets long-term goals.

Effective September 21, 2026, units of the Fund will no longer be available for purchase. Existing unitholders may redeem or switch their units of the Fund for settlement on or prior to the close of business on November 17, 2026. After that time, any remaining unitholders will have their units automatically redeemed at the net asset value per unit as of the Termination Date.

The Manager intends to wind down the Fund in an orderly manner. In the period leading up to the Termination Date, the Fund’s portfolio holdings will be progressively liquidated and, as a result, the Fund may hold increasing levels of cash and cash equivalents. Consequently, the Fund may not remain fully invested in accordance with its investment objectives and investment strategies during the wind-down period, and this may affect the Fund’s performance.

A notice with further information regarding the termination of the Fund will be sent shortly to unitholders of the Fund. Unitholders are encouraged to speak with their Financial Advisors to discuss the Fund’s termination and their available investment options.

About Connor, Clark & Lunn Funds Inc.

CC&L Funds partners with leading Canadian financial institutions and their investment advisors to deliver unique institutional investment strategies to individual investors through a select offering of funds, alternative investments and separately managed accounts.

By limiting the offering to a focused group of investment solutions, CC&L Funds is able to deliver unique and differentiated strategies designed to enhance traditional investor portfolios. For more information, please visit www.cclfundsinc.com.

Caution Concerning Forward-Looking Information

Certain statements in this press release may contain forward-looking statements or forward-looking information that are predictive in nature and may include words such as “expects”, “anticipates”, “intends”, “plans”, believes”, “estimates”, and similar forward-looking expressions or negative versions thereof. All information other than statements of historical fact may be forward-looking information. All forward-looking information in this press release is qualified by these cautionary statements. Forward-looking information in this press release includes, but is not limited to, statements with respect to management’s beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, or expectations, including, but not limited to, the proposed termination of the Fund and the anticipated process for such termination. Such forward-looking information reflects management’s beliefs and is based on information currently available. Such forward-looking statements are based on current expectations and projections about future general economic, political, and other relevant market factors, and assumes there will be no changes to applicable tax or other laws or regulations. Although the Manager believes that the expectations reflected in such forward-looking information are reasonable, expectations and projections about future events are inherently subject to, among other things, risks and uncertainties, some of which may be unforeseeable and, accordingly, may prove to be incorrect at a future date. Forward-looking statements are not guarantees of future performance, and actual events could differ materially from those expressed or implied in any forward-looking statements. A number of important factors can contribute to these differences, including, but not limited to, general economic, political, and market factors in Canada and internationally, global equity and capital markets, business competition, and catastrophic events. You should avoid placing any undue reliance on forward-looking statements. The forward-looking information contained in this press release is presented as of the preparation date of this press release and should not be relied upon as representing the Manager’s views as of any date subsequent to the date of this press release. The Manager disclaims any and all responsibility to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as specifically required by law.

This communication is intended for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase any funds and/or investment products managed or advised by the Manager or any of its affiliates, and is not, and should not be construed as, investment, tax, legal, or accounting advice, and should not be relied upon in that regard. Commissions, fees, and expenses all may be associated with investments in funds and/or other investment products managed or advised by the Manager or any of its affiliates. Please read a fund’s offering memorandum or prospectus, as applicable, which contains detailed information, and speak to an advisor before investing. Funds are not guaranteed, their values change frequently, and investors may experience a gain or loss. Past performance may not be repeated.

For further information, please contact: Lisa Wilson, Manager, Product & Client Service, Connor, Clark & Lunn Funds Inc., 416-864-3120, Lwilson@cclgroup.com

The post Connor, Clark & Lunn Funds Inc. Announces the Termination of CC&L Diversified Income Fund appeared first on Groupe financier Connor, Clark & Lunn ltée.

“We can’t ignore the fact that there are emerging-market-type risks in some of the actions the US has been taking.” This is former Morgan Stanley Chief Economist Ellen Zetner’s take on how policy uncertainty and fiscal trajectory in the United States are increasingly mirroring traditional EM risk factors.

Fiscal incontinence and financial repression are macro risks that investors typically associate with emerging markets. Their developed counterparts have enjoyed valuation premiums in their stock and bond markets based on a perception of stronger fiscal and monetary discipline, as well as better institutional protections.

The current flare-up in sovereign bonds yields in developed markets partly reflects their governments’ failure to curb rising debt burdens by cutting public spending back to pre-Covid levels, coupled with anaemic growth (with the exception of the United States). Investors fear that, lacking the political will to rein in spending, governments in developed countries will adopt policies of financial repression, keeping interest rates below the rate of inflation to slow or reverse the rise in debt-to-GDP ratios.

Relative to developed markets, many emerging markets have become more fiscally and monetarily disciplined over the past decade. Having learnt the consequences of fiscal and monetary incontinence the hard way, they have strengthened central bank credibility, maintained positive real interest rates and improved macroeconomic resilience.

China’s export boom risks a backlash from trading partners

We having been gradually reducing portfolio exposure to leading Chinese exporters in recent months as risk grows of an international backlash to overproduction of high-end manufactured goods.

The internal contradictions in Beijing’s model for economic growth model have fuelled an export boom that is nearing the end of the road. While the Chinese Communist Party (CCP) has acknowledged that involution – or excessive levels of competition by firms producing more at low or negative margins – is unsustainable, we are yet to see any concrete measures to curb overcapacity.

“The world is not enough”

The issue is that China now accounts for 30% of global industrial production with the share set to grow to 45% by 2030 according to the UN. As noted by Council on Foreign Relations President Michael Froman in a piece for Foreign Affairs this month, this is a level of industrial dominance not seen since the United States at the end of the Second World War. He also emphasised that in 2025 China recorded the largest trade surplus in history in US dollar value terms, with exports growing at three times the rate of global goods trade.

China has outgrown its economic model and the global economy’s capacity to absorb its exports. It must take decisive steps to rebalance towards an economy driven by consumption. Unfortunately, CCP policy incentives underpinning rigid GDP growth targets and local government financing create powerful and entrenched feedback loops that fuel overcapacity, which is vented to the rest of the world through exports.

While flooding the world with cheap goods has been a disinflationary force over several decades, it has also created huge trade imbalances leading to de-industrialisation and rising debt in many of China’s trading partners. China’s economic model suppresses domestic consumption in order to maximise industrial output through an undervalued currency, subsidies and preferential financing (among other measures). Peking University economist Michael Pettis argues that this system defies David Ricardo’s principle of comparative advantage, explaining why free trade maximises global output. To quote from a Substack post by Pettis in February this year:

Competitive advantage is not the same as a comparative advantage. The former means an economy is able to produce more cheaply than its trade partners. The latter means that the relative “cheapness” with which an economy produces some goods is greater than the relative “cheapness” with which it produces other goods, so that it can only have a comparative advantage in roughly half the goods it produces.

This is because comparative advantage is about relative costs, not absolute costs, and while an economy can have lower absolute costs in most or even all things, by definition it cannot have lower relative costs in much more than half of what it produces. Ricardo’s example shows this very clearly. In his model. Portugal produces both textiles and wine more cheaply and efficiently than England, which means that Portugal has a competitive advantage in all goods, and England a competitive disadvantage in all goods.

But Ricardo did not argue that the world would benefit if Portugal produced both wine and textiles, with England producing neither and acquiring them by running trade deficits with Portugal. Instead, he showed that because the relative “cheapness” with which Portugal produces wine is greater than the relative “cheapness” with which it produces textiles, Portugal only has a comparative advantage in producing wine, and England has a comparative advantage in producing textiles. He showed that if Portugal only produces wine, and exports some of it to England to buy textiles, and if England only produces textiles, and exports some of it to Portugal to buy wine, trade would be balanced and total output would be maximized – and as counterintuitive as it may seem, this is the case even though Portugal can produce textiles more cheaply and efficiently than England.

Looking at today’s global trading system, Ricardo might argue that China’s exploitation of its competitive advantage is creating persistent global imbalances, as a result of which global production falls and unemployment rises, or “debt must rise in deficit countries to make up for weak demand in the surplus country and to prevent unemployment from rising.”

We can see both of these outcomes occurring in Europe. France relies on debt to prop up demand while Germany’s industrial giants are announcing the largest layoffs since the Global Financial Crisis.

Volkswagen flags 50,000 job cuts across group as board approves turnaround plan (Reuters, September 3, 2026)

Volkswagen’s supervisory board on Thursday approved a transformation plan that will include cutting another 50,000 jobs in its attempt to counter painful tariffs, overcapacity and aggressive Chinese ​rivals.

The plan, the most extensive restructuring in Volkswagen’s 89-year history, includes exploring alternatives for four German plants ​that will eventually run out of models during the next decade.

As Stein’s Law goes, “if something cannot go on forever, it will stop.” China’s domestic economic imbalances are provoking social and political responses among its major trading partners. In response, governments in virtually all advanced economies have taken their first steps to address the issue, enacting stronger import duties, local content requirements, and even bans on Chinese equipment in sensitive sectors such as telecoms. However, these measures will fall short without structural change in China.

Layoffs in the German auto industry virtually guarantee a more forceful and coordinated response from Europe.

Italian lobby group calls for 80% EU tariff on Chinese cars and parts (Reuters, September 10, 2026)

The head of Italian auto suppliers lobby Anfia has urged the European Union to impose 80% tariffs on Chinese-made vehicles and parts above a certain threshold to safeguard Europe’s ​car industry.

Anfia President Roberto Vavassori told Reuters that Chinese imports to the European Union ‌should be tariff-free up to 8% of annual European vehicle registrations, but with an 80% tariff on imports above that limit.

It should cover both vehicles and components, he said, as parts account for roughly 80% of a vehicle’s value. “We have ​maximum respect for what the Chinese industry has achieved,” Vavassori told Reuters. “But that respect has ​now turned into fear.”

“Europe cannot lose an industry which is essential for its ⁠strategic autonomy.”

His comments come days after Volkswagen approved a major restructuring in the face of slumping demand and ​increasing competition from China. Figures from the European Automobile Manufacturers’ Association (ACEA) showed that the share of Chinese-branded cars sold ​in the EU rose to top 9% in the first half of this year.

Other countries fearing the damage of a China supply shock to their leading manufacturing industries may also seek to collaborate with Europe and the United States to address the issue. There are strong incentives for both China and major trading partners to collaborate with the aim of engineering a gradual rebalancing over decades, lest more sudden measures trigger an external demand collapse for Chinese exporters, and globally inflationary supply chain disruption.

We remain admirers of the Chinese entrepreneurs that have built outstanding businesses across autos, renewable energy, batteries, heavy industries and other advanced manufacturing processes. The leaders in these industries have been innovators able to scale across a continental-sized economy amid ferocious competition and go global to challenge incumbents. In our view, their long-term prospects remain bright and they would continue to prosper in a more balanced environment for international trade, and in a domestic environment where competition is rationalised through the re-alignment of economic policy incentives that promote more sustainable growth. However, portfolio changes including reducing exposure to battery manufacturer CATL and avoiding automaker BYD altogether for the past year or more reflect lower conviction levels over the short to medium term as we move through a period of realignment in international trade.

October’s presidential election in Brazil will be a tight contest

Source: Polymarket, 10 September 2026

We wrote previously on how political uncertainty has weighed on Brazilian equities:

Brazilian Blackjack: Decoding the allure of a high-risk, high-reward market

Brazilian Blackjack revisited

Crunch time is approaching with the presidential election set to take place in less than a month. Picking up the blackjack analogy, it is safe to say there are no high cards (more moderate and economically conservative candidates stepping up to make a run) left in the deck to be dealt in this political cycle. Voters are set to choose between two deeply flawed candidates in incumbent Lula and Flavio Bolsonaro, who are both fending off corruption allegations.

Nevertheless, our view was that political risk was reflected in extremely cheap valuations for some high-quality businesses, which led us to move to a modest overweight in Brazilian equities. The market has been rallying in recent weeks, partly reflecting a betting-market lead for Flavio Bolsonaro, perceived by investors as more market friendly (debatable in our view).

We read the market move with some caution. The betting-market odds are out of line with the polls, which remain a statistical tie in second-round simulations, and much of the recent shift tracks an internal Supreme Court dispute and leaked communications weighing on Lula rather than a durable realignment of the electorate.

With a first round on 4 October and a probable runoff on the 25th, event risk is high and early, contrarian positioning has been rewarded already. Our exposure remains focused on quality names trading below intrinsic value, and sized to give us room to take advantage of volatility in the months ahead.

The post Are we all emerging markets now? appeared first on Groupe financier Connor, Clark & Lunn ltée.

“We can’t ignore the fact that there are emerging-market-type risks in some of the actions the US has been taking.” This is former Morgan Stanley Chief Economist Ellen Zetner’s take on how policy uncertainty and fiscal trajectory in the United States are increasingly mirroring traditional EM risk factors.

Fiscal incontinence and financial repression are macro risks that investors typically associate with emerging markets. Their developed counterparts have enjoyed valuation premiums in their stock and bond markets based on a perception of stronger fiscal and monetary discipline, as well as better institutional protections.

The current flare-up in sovereign bonds yields in developed markets partly reflects their governments’ failure to curb rising debt burdens by cutting public spending back to pre-Covid levels, coupled with anaemic growth (with the exception of the United States). Investors fear that, lacking the political will to rein in spending, governments in developed countries will adopt policies of financial repression, keeping interest rates below the rate of inflation to slow or reverse the rise in debt-to-GDP ratios.

Relative to developed markets, many emerging markets have become more fiscally and monetarily disciplined over the past decade. Having learnt the consequences of fiscal and monetary incontinence the hard way, they have strengthened central bank credibility, maintained positive real interest rates and improved macroeconomic resilience.

China’s export boom risks a backlash from trading partners

We having been gradually reducing portfolio exposure to leading Chinese exporters in recent months as risk grows of an international backlash to overproduction of high-end manufactured goods.

The internal contradictions in Beijing’s model for economic growth model have fuelled an export boom that is nearing the end of the road. While the Chinese Communist Party (CCP) has acknowledged that involution – or excessive levels of competition by firms producing more at low or negative margins – is unsustainable, we are yet to see any concrete measures to curb overcapacity.

“The world is not enough”

The issue is that China now accounts for 30% of global industrial production with the share set to grow to 45% by 2030 according to the UN. As noted by Council on Foreign Relations President Michael Froman in a piece for Foreign Affairs this month, this is a level of industrial dominance not seen since the United States at the end of the Second World War. He also emphasised that in 2025 China recorded the largest trade surplus in history in US dollar value terms, with exports growing at three times the rate of global goods trade.

China has outgrown its economic model and the global economy’s capacity to absorb its exports. It must take decisive steps to rebalance towards an economy driven by consumption. Unfortunately, CCP policy incentives underpinning rigid GDP growth targets and local government financing create powerful and entrenched feedback loops that fuel overcapacity, which is vented to the rest of the world through exports.

While flooding the world with cheap goods has been a disinflationary force over several decades, it has also created huge trade imbalances leading to de-industrialisation and rising debt in many of China’s trading partners. China’s economic model suppresses domestic consumption in order to maximise industrial output through an undervalued currency, subsidies and preferential financing (among other measures). Peking University economist Michael Pettis argues that this system defies David Ricardo’s principle of comparative advantage, explaining why free trade maximises global output. To quote from a Substack post by Pettis in February this year:

Competitive advantage is not the same as a comparative advantage. The former means an economy is able to produce more cheaply than its trade partners. The latter means that the relative “cheapness” with which an economy produces some goods is greater than the relative “cheapness” with which it produces other goods, so that it can only have a comparative advantage in roughly half the goods it produces.

This is because comparative advantage is about relative costs, not absolute costs, and while an economy can have lower absolute costs in most or even all things, by definition it cannot have lower relative costs in much more than half of what it produces. Ricardo’s example shows this very clearly. In his model. Portugal produces both textiles and wine more cheaply and efficiently than England, which means that Portugal has a competitive advantage in all goods, and England a competitive disadvantage in all goods.

But Ricardo did not argue that the world would benefit if Portugal produced both wine and textiles, with England producing neither and acquiring them by running trade deficits with Portugal. Instead, he showed that because the relative “cheapness” with which Portugal produces wine is greater than the relative “cheapness” with which it produces textiles, Portugal only has a comparative advantage in producing wine, and England has a comparative advantage in producing textiles. He showed that if Portugal only produces wine, and exports some of it to England to buy textiles, and if England only produces textiles, and exports some of it to Portugal to buy wine, trade would be balanced and total output would be maximized – and as counterintuitive as it may seem, this is the case even though Portugal can produce textiles more cheaply and efficiently than England.

Looking at today’s global trading system, Ricardo might argue that China’s exploitation of its competitive advantage is creating persistent global imbalances, as a result of which global production falls and unemployment rises, or “debt must rise in deficit countries to make up for weak demand in the surplus country and to prevent unemployment from rising.”

We can see both of these outcomes occurring in Europe. France relies on debt to prop up demand while Germany’s industrial giants are announcing the largest layoffs since the Global Financial Crisis.

Volkswagen flags 50,000 job cuts across group as board approves turnaround plan (Reuters, September 3, 2026)

Volkswagen’s supervisory board on Thursday approved a transformation plan that will include cutting another 50,000 jobs in its attempt to counter painful tariffs, overcapacity and aggressive Chinese ​rivals.

The plan, the most extensive restructuring in Volkswagen’s 89-year history, includes exploring alternatives for four German plants ​that will eventually run out of models during the next decade.

As Stein’s Law goes, “if something cannot go on forever, it will stop.” China’s domestic economic imbalances are provoking social and political responses among its major trading partners. In response, governments in virtually all advanced economies have taken their first steps to address the issue, enacting stronger import duties, local content requirements, and even bans on Chinese equipment in sensitive sectors such as telecoms. However, these measures will fall short without structural change in China.

Layoffs in the German auto industry virtually guarantee a more forceful and coordinated response from Europe.

Italian lobby group calls for 80% EU tariff on Chinese cars and parts (Reuters, September 10, 2026)

The head of Italian auto suppliers lobby Anfia has urged the European Union to impose 80% tariffs on Chinese-made vehicles and parts above a certain threshold to safeguard Europe’s ​car industry.

Anfia President Roberto Vavassori told Reuters that Chinese imports to the European Union ‌should be tariff-free up to 8% of annual European vehicle registrations, but with an 80% tariff on imports above that limit.

It should cover both vehicles and components, he said, as parts account for roughly 80% of a vehicle’s value. “We have ​maximum respect for what the Chinese industry has achieved,” Vavassori told Reuters. “But that respect has ​now turned into fear.”

“Europe cannot lose an industry which is essential for its ⁠strategic autonomy.”

His comments come days after Volkswagen approved a major restructuring in the face of slumping demand and ​increasing competition from China. Figures from the European Automobile Manufacturers’ Association (ACEA) showed that the share of Chinese-branded cars sold ​in the EU rose to top 9% in the first half of this year.

Other countries fearing the damage of a China supply shock to their leading manufacturing industries may also seek to collaborate with Europe and the United States to address the issue. There are strong incentives for both China and major trading partners to collaborate with the aim of engineering a gradual rebalancing over decades, lest more sudden measures trigger an external demand collapse for Chinese exporters, and globally inflationary supply chain disruption.

We remain admirers of the Chinese entrepreneurs that have built outstanding businesses across autos, renewable energy, batteries, heavy industries and other advanced manufacturing processes. The leaders in these industries have been innovators able to scale across a continental-sized economy amid ferocious competition and go global to challenge incumbents. In our view, their long-term prospects remain bright and they would continue to prosper in a more balanced environment for international trade, and in a domestic environment where competition is rationalised through the re-alignment of economic policy incentives that promote more sustainable growth. However, portfolio changes including reducing exposure to battery manufacturer CATL and avoiding automaker BYD altogether for the past year or more reflect lower conviction levels over the short to medium term as we move through a period of realignment in international trade.

October’s presidential election in Brazil will be a tight contest

Source: Polymarket, 10 September 2026

We wrote previously on how political uncertainty has weighed on Brazilian equities:

Brazilian Blackjack: Decoding the allure of a high-risk, high-reward market

Brazilian Blackjack revisited

Crunch time is approaching with the presidential election set to take place in less than a month. Picking up the blackjack analogy, it is safe to say there are no high cards (more moderate and economically conservative candidates stepping up to make a run) left in the deck to be dealt in this political cycle. Voters are set to choose between two deeply flawed candidates in incumbent Lula and Flavio Bolsonaro, who are both fending off corruption allegations.

Nevertheless, our view was that political risk was reflected in extremely cheap valuations for some high-quality businesses, which led us to move to a modest overweight in Brazilian equities. The market has been rallying in recent weeks, partly reflecting a betting-market lead for Flavio Bolsonaro, perceived by investors as more market friendly (debatable in our view).

We read the market move with some caution. The betting-market odds are out of line with the polls, which remain a statistical tie in second-round simulations, and much of the recent shift tracks an internal Supreme Court dispute and leaked communications weighing on Lula rather than a durable realignment of the electorate.

With a first round on 4 October and a probable runoff on the 25th, event risk is high and early, contrarian positioning has been rewarded already. Our exposure remains focused on quality names trading below intrinsic value, and sized to give us room to take advantage of volatility in the months ahead.

The post Are we all emerging markets now? appeared first on Groupe financier Connor, Clark & Lunn ltée.

The key measure used to track the cycle is the annual change in G7 stockbuilding, expressed as a percentage of GDP. This is supplemented by a more timely indicator derived from business surveys, which displays a strong correlation with the GDP measure – see chart 1.

Chart 1

The GDP indicator last bottomed in Q1 2023, implying that the current upswing is mature, already matching the historical average duration of a whole cycle (of 3.5 years).

The GDP measure reached a level consistent with a peak in Q1 2025 but stockbuilding behaviour around that time was distorted by front-running of US tariffs. A correction over subsequent quarters has run its course, with the business survey indicator signalling a strong rebound in Q3 2026. This is supported by other evidence, e.g. the Atlanta Fed US GDP nowcast currently estimates that stockbuilding will contribute 2.0 pp to annualised Q3 growth.

The judgement here, therefore, is that the cycle is reaching a final peak in Q3 ahead of a multi-quarter downswing.

The cycle describes demand for production inputs – both raw materials and semi-manufactures, including electronic components – so is strongly correlated with their prices. A further rise in year-on-year growth of industrial commodity prices and global semiconductor sales in Q3 is consistent with the cycle reaching a peak – chart 2.

Chart 2

The suggestion is that the cycle about to shift from providing a tailwind to global economic momentum and pricing power to acting as a progressive headwind, with a maximum negative impact in mid-to-late 2027.

The risk of economic weakness next year is magnified by signs that a downswing in the long-term housing cycle is on track to accelerate into a 2027-28 low. The cycle has averaged 18 years historically, with the last trough reached in 2009.

The behaviour of homebuilding stocks may provide a clue to the timing of the next low. Chart 3 shows that an average of stock prices of US and UK homebuilders reached a peak 47 and 37 months respectively before lows in the last two housing cycles, in 1991 and 2009, while UK prices peaked 33 months before a previous trough in 1975.

Chart 3

The most recent peak in the average occurred in September 2024, suggesting a cycle trough between June 2027 and August 2028.

UK homebuilding stocks broke below a 2025 low in March and have yet to regain this level. US stocks currently remain above the corresponding low; an equivalent breakdown would suggest an acceleration of the cycle downswing – chart 4.

Chart 4

Joint weakness of the stockbuilding and housing cycles in 2027 would likely overpower and / or shorten the current business investment cycle upswing.

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The key measure used to track the cycle is the annual change in G7 stockbuilding, expressed as a percentage of GDP. This is supplemented by a more timely indicator derived from business surveys, which displays a strong correlation with the GDP measure – see chart 1.

Chart 1

The GDP indicator last bottomed in Q1 2023, implying that the current upswing is mature, already matching the historical average duration of a whole cycle (of 3.5 years).

The GDP measure reached a level consistent with a peak in Q1 2025 but stockbuilding behaviour around that time was distorted by front-running of US tariffs. A correction over subsequent quarters has run its course, with the business survey indicator signalling a strong rebound in Q3 2026. This is supported by other evidence, e.g. the Atlanta Fed US GDP nowcast currently estimates that stockbuilding will contribute 2.0 pp to annualised Q3 growth.

The judgement here, therefore, is that the cycle is reaching a final peak in Q3 ahead of a multi-quarter downswing.

The cycle describes demand for production inputs – both raw materials and semi-manufactures, including electronic components – so is strongly correlated with their prices. A further rise in year-on-year growth of industrial commodity prices and global semiconductor sales in Q3 is consistent with the cycle reaching a peak – chart 2.

Chart 2

The suggestion is that the cycle about to shift from providing a tailwind to global economic momentum and pricing power to acting as a progressive headwind, with a maximum negative impact in mid-to-late 2027.

The risk of economic weakness next year is magnified by signs that a downswing in the long-term housing cycle is on track to accelerate into a 2027-28 low. The cycle has averaged 18 years historically, with the last trough reached in 2009.

The behaviour of homebuilding stocks may provide a clue to the timing of the next low. Chart 3 shows that an average of stock prices of US and UK homebuilders reached a peak 47 and 37 months respectively before lows in the last two housing cycles, in 1991 and 2009, while UK prices peaked 33 months before a previous trough in 1975.

Chart 3

The most recent peak in the average occurred in September 2024, suggesting a cycle trough between June 2027 and August 2028.

UK homebuilding stocks broke below a 2025 low in March and have yet to regain this level. US stocks currently remain above the corresponding low; an equivalent breakdown would suggest an acceleration of the cycle downswing – chart 4.

Chart 4

Joint weakness of the stockbuilding and housing cycles in 2027 would likely overpower and / or shorten the current business investment cycle upswing.

The post Cycle update: expected 2027 weakness crystallising appeared first on Groupe financier Connor, Clark & Lunn ltée.

If AI hasn’t already struck fear in the minds of the general population, humanoid robots are threatening to break the confines of the lab and enter the real world. It’s been hard to ignore those funny humanoid robot videos but it’s not all about party tricks and dance moves. Deployments are expected to surge from today’s tens of thousands to millions in the next decade, driven by broadening commercial and industrial applications.

What’s stopped full-scale adoption in the past?

Robots themselves are not new. They have been performing singular mechanical tasks like painting, welding or assembling for decades. There is no shortage of demand for real-world applications, but the biggest constraint for full-scale, multipurpose adoption remains a lack of real-world training data.

Unlike LLMs where most of the training data resides on the internet, robots need data from the physical world, including watching humans performing various mundane and complex tasks in unpredictable environments (called physical AI). However, the race is on to use real-world and synthetic data to create the data flywheel that will enable rollout at scale. AI-based simulation algorithms can now replicate physical-world training data and compress the learning cycle from years to days.

Additional constraints to humanoid robot adoption are the lack of dexterity and limited battery life that prevent robots from taking up complex and mission critical tasks – for now.

What’s changed now to drive full-scale adoption?

As per CLSA, there are four key trends beneath the surface that could be changing the paradigm when it comes to full-scale commercialization of humanoids.

1. Actuators used to convert electrical energy into kinetic energy (movement) are being standardized across the industry with energy efficient and precise electric actuators (vs. leaky hydraulic actuators).
2. A move toward modularization where the motor, reducer, inverter and controller are housed in one integrated unit which is easier to mass produce.
3. Reducers are what give robotic joints the power to lift weights. Advances in AI software are helping decrease inaccuracies in low-cost planetary reducers, therefore enhancing performance while bringing overall costs down.
4. Finally, the adoption of linear actuators which use convert rotational energy into straight-line thrust, mimicking the contraction and extension of human muscles. This helps with heavy load bearing capacity and better shock absorption on ground impact.

Where will demand come from?

• Manufacturing – particularly in automotive industries which have both the scale and assembly line processes to enable large-scale adoption. We also see auto component companies as fertile ground for the emergence of humanoid robot opportunities, given their scale manufacturing and quality control experience.
• Retail and facilities management – from tasks like customer service, cleaning and delivery-related work.
• Logistics – tasks around assembly, packaging, inspection and transportation.
• Defence and hazardous tasks – from mine clearing to dangerous material handling.

We have several holdings in the emerging market small cap portfolio that could potentially benefit from the coming robotics revolution. Sinbon Electronics Co. Ltd. (3023 TT) supplies sensors and connectors for both battery charging and signal transmission, and video capture harnesses directly to humanoid robot OEMs. Reliability and quality requirements are stringent and Sinbon is a sole supplier for at least two US humanoid clients.

Similarly, pneumatic actuators and linear motion components are among the most widely used parts in humanoid robot joint and limb assemblies and Airtac International Group (1590 TT) is an important supplier in this space. We also believe holdings such as WeRide Inc. (WRD US) and Dongguan Yiheda Automation Co. Ltd. (301029 CH) could potentially benefit from increased investment in humanoid robotics.

We believe emerging markets will be at the heart of the humanoid revolution. According to Bloomberg, China accounted for almost all global humanoid shipments so far this year. Just as how Asian supply chains deliver the picks and shovels enabling the current AI buildout, we think a similar story will play out in robotics as the current supply chain leverages its scale and manufacturing excellence to mass produce everything from actuators, reducers, sensors and cables that are needed to power this revolution.

The companies discussed are provided for illustrative purposes to demonstrate the investment team’s research into the robotics theme and are not intended as investment recommendations. There is no assurance that these companies will benefit from increased adoption of humanoid robotics or that the investment thesis will develop as anticipated.

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