Εβδομαδιαία Επισκόπηση: Διεθνής Οικονομία & Αγορές, 20/10/26
AI expected returns and energy market volatility shape the investment landscape
Global Technology stocks declined sharply by -7.4% wow due to, inter alia, concerns regarding the sustainability of hefty profit margins amid higher-than-previously expected cost of debt.
The KOSPI Index declined by -14.5% wow (+34.5% ytd). Samsung (-17.7% wow) and skHynix (-24.3% wow), which collectively make up c. 55% of the KOSPI’s market capitalization, recorded heavy losses. These companies specialize and are heavily invested in the data storage and retrieval field (“AI memory stocks”), a crucial part in the development of AI data centers. Selling pressures were intensified after China-based CXMT company announced a technological breakthrough in that field.
China’s real GDP growth accelerated to +4.5% yoy in Q3:2026 from a 3½-year low of +4.3% yoy in Q2:2026 (+0.9% qoq), with strong external demand providing support. The latest outcome was somewhat above consensus estimates for +4.4% yoy.
In year-to-date terms, the annual growth stands at +4.6%, with the official target for full year 2026 at a range of 4.5% to 5.0%, down from “around 5%” in the previous years to allow for more flexibility in the pursuit of various objectives, some of which of a more qualitative nature. According to the International Monetary Fund (World Economic Outlook, October 2026), China’s annual real GDP growth is expected at +4.5% in 2026 followed by +4.0% in 2027 (+5.0% in 2025), with moderate revisions compared to respective ones three months ago.
The war in the Middle-East clouds the global economic outlook, albeit energy markets have insofar weathered the shock better than expected, with a rerouting of energy supplies, increased energy production in other countries, inventory drawdowns, substitution to other sources of energy (including renewables) and higher energy efficiency, cushioning the impact.
In addition, the impact from the war is partly offset by the continued acceleration in the demand-driven momentum in the field of Artificial Intelligence and respective progress in investment and productivity. As a result, country-wise, the outlook is highly dependent on the extent of direct exposure to war shock and on the participation in the technology upturn.
Recall that IMF’s working assumption is for a reopening of the Strait of Hormuz in March 2027 and for a full resumption of flows gradually by October 2027. According to the International Energy Agency (IEA), global oil supply rose meaningfully on a monthly basis in September, by 2.5 million barrels per day (“mb/d”) to 102.3 mb/d, lagging by -5.6 mb/d from past February just prior to the war in Iran.
September’s recovery was due to an increase in exports from the Persian Gulf region, by +4.4 mb/d to 13.9 mb/d (75% of pre-war levels), with both a higher production and an inventory drawdown contributing. In turn, the increased exports came mostly on the back of a rise in flows from the Strait of Hormuz, +3.7 mb/d to 10.9 mb/d.
Nevertheless, the latter was accomplished via methods (e.g. ship-to-ship transfers and with military escort) of limited sustainability, and which entail much higher transport costs, given also the still acute physical transit risk. As a result, the price of Brent futures for the closest delivery (i.e. December 2026) remains elevated at c. $111/barrel as of October 20th (+82% yoy) and European TTF prices for delivery in November close to €90/MWh (+185% yoy).
Global Technology stocks declined sharply by -7.4% wow due to, inter alia, concerns regarding the sustainability of hefty profit margins amid higher-than-previously expected cost of debt.
The KOSPI Index declined by -14.5% wow (+34.5% ytd). Samsung (-17.7% wow) and skHynix (-24.3% wow), which collectively make up c. 55% of the KOSPI’s market capitalization, recorded heavy losses. These companies specialize and are heavily invested in the data storage and retrieval field (“AI memory stocks”), a crucial part in the development of AI data centers. Selling pressures were intensified after China-based CXMT company announced a technological breakthrough in that field.
China’s real GDP growth accelerated to +4.5% yoy in Q3:2026 from a 3½-year low of +4.3% yoy in Q2:2026 (+0.9% qoq), with strong external demand providing support. The latest outcome was somewhat above consensus estimates for +4.4% yoy.
In year-to-date terms, the annual growth stands at +4.6%, with the official target for full year 2026 at a range of 4.5% to 5.0%, down from “around 5%” in the previous years to allow for more flexibility in the pursuit of various objectives, some of which of a more qualitative nature. According to the International Monetary Fund (World Economic Outlook, October 2026), China’s annual real GDP growth is expected at +4.5% in 2026 followed by +4.0% in 2027 (+5.0% in 2025), with moderate revisions compared to respective ones three months ago.
The war in the Middle-East clouds the global economic outlook, albeit energy markets have insofar weathered the shock better than expected, with a rerouting of energy supplies, increased energy production in other countries, inventory drawdowns, substitution to other sources of energy (including renewables) and higher energy efficiency, cushioning the impact.
In addition, the impact from the war is partly offset by the continued acceleration in the demand-driven momentum in the field of Artificial Intelligence and respective progress in investment and productivity. As a result, country-wise, the outlook is highly dependent on the extent of direct exposure to war shock and on the participation in the technology upturn.
Recall that IMF’s working assumption is for a reopening of the Strait of Hormuz in March 2027 and for a full resumption of flows gradually by October 2027. According to the International Energy Agency (IEA), global oil supply rose meaningfully on a monthly basis in September, by 2.5 million barrels per day (“mb/d”) to 102.3 mb/d, lagging by -5.6 mb/d from past February just prior to the war in Iran.
September’s recovery was due to an increase in exports from the Persian Gulf region, by +4.4 mb/d to 13.9 mb/d (75% of pre-war levels), with both a higher production and an inventory drawdown contributing. In turn, the increased exports came mostly on the back of a rise in flows from the Strait of Hormuz, +3.7 mb/d to 10.9 mb/d.
Nevertheless, the latter was accomplished via methods (e.g. ship-to-ship transfers and with military escort) of limited sustainability, and which entail much higher transport costs, given also the still acute physical transit risk. As a result, the price of Brent futures for the closest delivery (i.e. December 2026) remains elevated at c. $111/barrel as of October 20th (+82% yoy) and European TTF prices for delivery in November close to €90/MWh (+185% yoy).