Market Watch
Astero Falcon DIFC Limited September 2026
Macroeconomics: Elevated Inflation and a Slowing Labour Market
01
Earnings Season: Seventh Consecutive Quarter of Double-Digit Earnings Growth
03
Bonds: Yields Continue to Rise
05
Currencies: Failed Attempt to Intervene in the Yen and Treasury Market
07
Alternative Investments: A Potential Bottom in Precious Metals
08
Direct Investments: Liquidity Returns Through the Secondary Market
10
August: Volatility Amid Low Liquidity
12
For Professional Clients Only – Not for Retail Distribution.
Macroeconomics: Elevated Inflation and a Slowing Labour Market
01
In August 2026, US data painted a mixed picture:
Retail sales and food services totalled $764 billion
inflation remained elevated, consumer demand
in July, declining by 0.6% from June, although
weakened, the labour market nearly stalled, and
annual growth remained at 5.0%. Sales in the
GDP growth was moderate. For investors, this
May–July period were 6.3% higher than in the
implies greater market dependence on Federal
comparable period of the previous year. The
Reserve decisions and, at the same time, a high
monthly decline points to cooling consumer
risk of statistical revisions.
demand after a relatively strong first half of the
The Consumer Price Index rose by 0.1% month-onmonth in July, following a 0.4% decline in June. On a year-on-year basis, CPI stood at 3.4%, while the core measure, excluding food and energy, was
year. At the same time, annual growth remains sufficiently high, so this is more a normalisation in momentum
than
a
full-scale
consumption
recession.
2.5% y/y. Inflation has slowed from the previous
Oil
year but remains materially above the Fed’s 2%
escalation in the Middle East at the end of August
target. This limits the scope for rapid rate cuts. For
supported oil prices after their previous decline. If
equities, the reading is moderately positive, but it
the increase in prices proves persistent, the energy
does not provide the Fed with sufficient grounds
factor could again amplify inflation expectations
for aggressive policy easing.
and pressure on long-term yields.
In July, personal income rose by 0.4% month-onmonth, disposable income by 0.5%, and consumer spending by 0.2%. PCE is particularly important because the Federal Reserve uses it as its primary inflation
gauge.
According
to
GDP
statistics
published in August, core PCE for Q2 was revised up to 3.6% on an annual basis, pointing to more persistent
price
pressure
than
previously
assumed.
Non-farm payrolls fell by 23,000 in July, while the unemployment rate remained at 4.1%. Over the preceding 12 months, average payroll growth was around 34,000 per month, so the July data pointed to a material slowdown in the labour market. Job losses were recorded, in particular, in local education and retail trade, while employment in healthcare continued to rise. It is important to note that the BLS revised down its preliminary March 2026 payroll estimate by a further 79,000, reinforcing doubts about the labour market’s resilience.
Source: Bloomberg, Astero Falcon analytics.
remains
an
additional
risk.
A
renewed
Macroeconomics: Elevated Inflation and a Slowing Labour Market
02
US August 2026 inflation readings
Inflation remained elevated in July 2026, with both CPI and PCE readings above the Federal Reserve’s 2% target. The higher PCE readings, in particular, suggest that underlying price pressure persisted despite signs of slowing economic activity.
Source: Bloomberg, Astero Falcon analytics.
Earnings Season: Seventh Consecutive Quarter of Double-Digit Earnings Growth The US earnings season has concluded, showing exceptionally strong earnings growth in Q2. According to FactSet, aggregate earnings growth for S&P 500 companies exceeded 50% year-onyear, the strongest result since Q2 2021.
The unusually high earnings growth was driven by the positive earnings surprises reported by Alphabet ($9.11 versus $2.88 expected) and Amazon.com ($5.75 versus $1.82). Alphabet’s Q2 result included $98 billion in gains from unrealised equity appreciation, while Amazon.com’s earnings included $53 billion generated from its investment in Anthropic. Even excluding Alphabet and Amazon, average earnings growth across companies was around 32%.
Approximately 86% of companies reporting results exceeded earnings-per-share estimates, compared with a five-year average of 78%. Aggregate earnings exceeded forecasts by 26.5%, significantly above historical norms.
Source: Bloomberg, Astero Falcon analytics.
03
Average revenue growth among S&P 500 companies was around 15%, the highest since Q4 2021. Eight sectors recorded double-digit earnings growth in Q2, led by energy at +147% y/y.
Analysts expect earnings growth of around 27% in Q3, 25% in Q4 and 30% for full-year 2026. Meanwhile, the S&P 500 forward P/E stands at around 20x, above its 10-year average of 19x. In other words, fundamentals are excellent, but expectations and valuations are already relatively high.
We expect the equity market to continue rising through the end of this year, but in election years it often enters a correction from the second half of September to mid-October. This is followed by a period of strong equity-market growth from October to December, as political risks recede and the allocation of seats in the US Senate and House of Representatives becomes clearer.
Earnings Season: Seventh Consecutive Quarter of Double-Digit Earnings Growth
04
S&P 500 Earnings Growth
S&P 500 earnings grew by 50% in Q2. Excluding the exceptional results of Amazon and Alphabet, average growth was 32%, while the energy sector was the leading performer, with earnings rising 147% y/y.
Nvidia
Despite excellent results, including revenue growth of +106% y/y, Nvidia shares were unable to reach a new all-time high. The company’s share price is at the same level it was in October 2025: we still consider the semiconductor sector attractive, but Nvidia is not the most compelling investment idea within the industry. Source: Bloomberg, Astero Falcon analytics.
Bonds: Yields Continue to Rise In August, pressure on the long end of the US Treasury curve intensified materially. The 30-year Treasury yield rose above 5.33%, its highest level since 2007. On August 19, the US Treasury announced that, from 9 September, it would increase the maximum volume of buybacks of securities with 10–20 and 20–30 year maturities from $2 billion to at least $4 billion per operation. The new parameters will remain in effect until the next quarterly refunding on November 4.
Officially, the programme remains a tool to support liquidity in individual issues and should not materially alter the volume of net market financing, as repurchased securities will be replaced with new issuance. For long-term rates, therefore, the structure of subsequent financing matters more than the volume of buybacks. If long-dated securities are replaced predominantly with shorter-dated issues, the amount of duration the private market must absorb will decline.
This also explains the focus on the Treasury General Account (TGA), the Treasury’s main account at the Federal Reserve, whose balance stands at $940–950 billion. Using part of these funds to repurchase Treasuries would temporarily increase bank reserves; however, it would not reduce public debt, as the cash buffer would subsequently need to be replenished through taxes or new borrowing.
05 If purchases of long-dated securities are accompanied by an increase in short-term issuance, the market will effectively receive less long-dated and more short-dated government debt. In terms of its effect on the maturity structure, this partly resembles Operation Twist. In 2011–2012, the Federal Reserve purchased around $667 billion of long-dated Treasuries while reducing its portfolio of short-dated securities by approximately the same amount. Unlike the quantitative easing of 2020, the current mechanism creates no new reserves and does not expand the central bank’s balance sheet.
The fiscal factor remains the main constraint. The US Treasury plans to raise $739 billion of net market financing in Q3 and $628 billion in Q4. Over the first ten months of fiscal year 2026, the budget deficit reached around $1.8 trillion, while net interest expenditure amounted to approximately 3.3% of GDP. Buybacks may alter the maturity structure of supply, but they do not reduce the government’s overall financing requirement.
Oil remains an additional risk. A renewed escalation in the Middle East at the end of August supported oil prices after their previous decline. If the increase in prices proves persistent, the energy factor could again amplify inflation expectations and pressure on long-term yields.
Kevin Warsh’s speech at Jackson Hole again shifted attention to inflation risks. He described current inflation as too high and indicated that, if insufficient progress is made in reducing it, a further rate increase remains possible. However, he gave no direct guidance on the next decision.
After the speech, the probability of a rate increase on 16 September rose to approximately 65% from 30%. However, the repricing of expectations was not accompanied by a comparable change in positioning. Some fast-money positioning and public forecasts shifted materially towards a September increase, whereas large asset managers have generally not shown a commensurate reduction in duration and retain a preference for the middle segment of the curve.
Source: Bloomberg, Astero Falcon analytics.
Bonds: Yields Continue to Rise
06
US 10-year Treasury yield
Technical analysis corroborates the fundamental conclusion and points to a further rise in yields. The 10year Treasury yield has broken higher from a three-year consolidation, with 6–6.5% as the potential target for this move.
EUR/USD FX rate blue and real interest rate differential orange
The current real interest-rate differential points to a fair EUR/USD exchange rate between 1.12 and 1.16.
Source: Bloomberg, Astero Falcon analytics.
Currencies: Failed Attempt to Intervene in the Yen and Treasury Market At the end of July, the Bank of Japan conducted a large-scale foreign-exchange intervention to strengthen the yen. For the first time in 40 years, the intervention was conducted jointly with the US Treasury: the Bank of Japan sold nearly $100 billion and the United States, by various estimates, $5–10 billion. The United States funded the operation mainly by selling euros rather than US dollars. Immediately after the operation, the yen appreciated by 5% against the dollar, but its gain for the month amounted to only 2%.
From the US perspective, the main motivation was support for the equity market: in order to buy yen, the Bank of Japan sells dollars and dollar assets. At the same time, the US Treasury announced plans to repurchase at least $4 billion of long-dated Treasuries in order to curb the sharp increase in the cost of long-term borrowing. As with the yen, these statements had little effect: the 10-year Treasury yield continues to rise and is close to a 20-year high of around 4.8%. Thirty-year Treasuries closed August at 5.25%.
07
Intervention in the yen temporarily and artificially weakened the dollar. At the same time, rising yields make the US currency more attractive than other G7 currencies, supporting a fundamental strengthening of the dollar. From the perspective of real interest-rate differentials, the fair EUR/USD exchange rate currently lies between 1.12 and 1.15. Technical analysis sends the same signal: since spring 2025, EUR/USD has traded in a broad range between 1.14 and 1.18, with the current rate of 1.16 exactly in the middle of this range. A breakout from this trading range would produce a strong directional move, but at the moment the currency pair currently lacks a pronounced trend.
USD/JPY
Despite the large-scale coordinated intervention, the yen resumed its decline once it ended and returned to 160 yen per dollar by the end of August. Investors are focused on the rise in Treasury yields and expect it to continue, which supports the dollar.
Source: Bloomberg, Astero Falcon analytics.
Alternative Investments: A Potential Bottom in Precious Metals After a prolonged lull and consolidation, cryptocurrencies and metals posted sharp gains in August. Silver was able to rise above $57, supported by the 61.8% retracement of the entire move between 2022 and 2026. We consider the long-term low to have already been established, with $81 per ounce as the next logical target and a medium-term consolidation between $57 and $70.
Bitcoin rose 30% over the month, while Ether (ETH) gained almost 40%. For one and a half months from mid-July, cryptocurrencies traded in a narrow 3–5% range, building energy for a directional move that ultimately took the form of a sharp price increase.
After the strong August rise, the two largest cryptocurrencies reached their 100-week moving averages, which in this case are likely to act as resistance. From current levels ($80,000 for Bitcoin and $2,500 for Ethereum) we expect consolidation and an opportunity to add to these assets at slightly lower prices. A full-fledged bull market will begin only once these cryptocurrencies establish themselves above their 100-week moving averages. We consider this likely to occur before the end of this year, and material price pullbacks would offer a good opportunity for long-term purchases.
We consider the long-term low in cryptocurrencies to have also been set, and the cryptoasset market is gradually moving from hibernation and a crypto winter towards the beginning of a new bull cycle, which could last 18–24 months. Medium-term catalysts for growth may include the passage of the Clarity Act and positive rhetoric from D. Trump, for whom crypto investors are an important part of the electorate and campaign donors.
XAG/USD
We consider silver to have already established a long-term price low at $57 per ounce. To enter a bullmarket regime, the metal would need to hold above $70 per ounce. In the near term, we expect consolidation between these levels, at $57–70.
Source: Bloomberg, Astero Falcon analytics.
08
Alternative Investments: A Potential Bottom in Precious Metals
09
XBT/USD
Thanks to the strong August rise, Bitcoin reached $80,000 per coin. Nevertheless, a significant resistance level, the 100-week moving average, lies at this level and is likely to remain a barrier for now. Only after holding above this level would the cryptocurrency enter a bull-market regime, while local pullbacks would be advantageous for long-term purchases.
Source: Bloomberg, Astero Falcon analytics.
Direct Investments: Liquidity Returns Through the Secondary Market Lazard estimated global secondary-market volume in H1 2026 at a record $124 billion, 28% higher yearon-year; over the last 12 months, volume reached $260 billion, approximately double the 2021 level. The market was balanced: GP-led transactions accounted for $61 billion and LP-led transactions for $63 billion. Lazard expects around $275 billion for the full year; 76% of surveyed investors are attracted to flagship funds, while 40% are attracted to evergreen funds or ’40 Act structures. This breadth is important: the secondary market is evolving from an emergency valve into a fully-fledged element of the liquidity system. For prospective investors, a GP’s exit plan is no less important than its ability to structure a fair continuation fund or preferred-equity solution when a conventional sale does not deliver maximum value.
Exit value is recovering faster than exit volumes. KPMG recorded $570 billion of global PE exit value across 1,315 transactions in H1 2026, while the number of exits reached its lowest level in more than a decade. Sales to strategic buyers accounted for $262 billion across 659 deals, sponsor-to-sponsor buyouts for $195 billion and 580 deals, and public offerings for $112 billion across only 76 transactions. The contrast is significant: a few large deals can raise aggregate value without providing broad distributions across vintages and managers. Strategic buyers are doing most of the work, while the IPO channel remains concentrated and sponsorled M&A has not yet recovered evenly.
Source: Bloomberg, Astero Falcon analytics.
10
On 19 August, Castelion announced a $1.0 billion Series C at a $13 billion valuation: $800 million of equity and a $250 million revolving credit facility. J.P. Morgan Strategic Investments and a16z co-led the equity round, with Carlyle among the participants. The funds are intended for programmes involving hypersonic and long-range strike systems. The structure is as important as the valuation: the equity component and revolving facility reflect working-capital and manufacturing needs that differ for hardware companies in the defence sector from those of a conventional software business. For VC investors, companies that address critical national-security bottlenecks are currently promising.
Global VC investment volume is rising, but its recovery is being driven mainly by mega-rounds. KPMG recorded $227 billion of global venture investment across 8,440 deals in Q2 2026, the second-largest quarterly result; the first quarter of this year was strong largely because of OpenAI’s $122 billion round. The Americas accounted for $150 billion and 3,999 deals, Asia for $51 billion and 2,676, and Europe for $25 billion and 1,636 deals. Anthropic’s $65 billion round, the second largest in KPMG’s data, best illustrates why aggregate investment volume is no longer a complete measure of the overall health of the venture market. Deal count has not followed volume to the same extent: a few capital-intensive companies are setting the trend. Investors should therefore assess vintage and manager access by stage and technical bottlenecks, rather than treating a record global amount as evidence of a broad market recovery.
Direct Investments: Liquidity Returns Through the Secondary Market
11
Global Secondary Market Volume GP led and LP led Transactions
The secondary market retained the growth momentum observed over the past two years, with transaction volume over the last 12 months (LTM) to June 2026 increasing relative to 2025. Supported by a number of structural factors affecting the market, both GP-led and LP-led segments reached new highs in transaction volume.
Source: Bloomberg, Astero Falcon analytics.
August: Volatility Amid Low Liquidity
12
S&P 500 Index average returns since 1931 Jan 1 indexed to 100
In election years, the equity market often enters a correction from the second half of September to midOctober. This is followed by a period of strong equity-market growth from October to December, as political risks recede and the allocation of seats between Democrats and Republicans in the US Senate and House of Representatives becomes clearer.
Source: Bloomberg, Astero Falcon analytics.
August: Volatility Amid Low Liquidity Fixed Imcpme Swiss Bond Index (SBI) AAA-BBB
Bloomberg Barclays Euro Aggregate Corporate TR
Bloomberg Barclays Pan-European High Yield TR
Bloomberg Barclays US Corporate High Yield TR
Bloomberg Barclays Sterling Corporate TR
Bloomberg Barclays China Aggregate TR
Bloomberg Barclays Asia USD High Yield TR
Bloomberg Barclays Global High Yield TR
JPM EMBI Global Total Return Index
Bloomberg Barclays Global-Aggregate TR
Equities NASDAQ 100 Stock Index
S&P 500 INDEX
Dow Jones Industrial Average
MSCI World Index
MSCI Europe Index
MSCI Emerging Markets Index
SPI
SMIM
DAX
FTSE 100 Index
Hang Seng Index
Shanghai Shenzhen CSI 300 Inde
Nikkei 225
Commodities Gold
Silver
Copper
WTI
BRENT
Bloomberg Commodity Index
Foreign Exchange EURCHF
CHFUSD
CHFGBP
EURUSD
EURGBP
GBPUSD
Source: Bloomberg, Astero Falcon analytics.
13
August 2026
2026
-1,07%
-0,97%
-0,23%
-0,25%
-1,24%
-0,28%
0,05%
-0,23%
1,09%
-0,28%
-0,23%
0,27%
2,15%
2,72%
0,06%
2,95%
5,08%
2,15%
2,37%
2,95%
August 2026
2026
-6,59%
-0,06%
0,38%
0,53%
1,00%
-3,03%
0,73%
-1,59%
2,53%
3,62%
13,45%
-7,41%
-8,13%
16,63%
12,96%
11,73%
13,83%
13,72%
24,45%
10,49%
6,99%
7,53%
11,71%
1,96%
1,60%
32,93%
August 2026
2026
9,34%
14,95%
1,49%
-1,50%
-0,90%
7,08%
-6,51%
-20,02%
13,95%
45,58%
46,31%
23,56%
August 2026
2026
0,74%
-0,02%
-0,47%
0,69%
0,18%
0,48%
0,70%
-1,85%
-2,37%
-1,19%
-1,73%
0,54%
Disclaimer This document has been prepared and issued by Astero Falcon (DIFC) Limited (“Astero Falcon”), a company incorporated in the Dubai International Financial Centre (“DIFC”), authorised and regulated by the Dubai Financial Services Authority (“DFSA”) under DFSA Firm Reference Number F010362.
Astero Falcon is authorised by the DFSA to carry on the Financial Services of Managing Assets, Advising on Financial Products or Credit, Arranging Deals in Investments and Arranging Custody, subject to the scope, conditions and restrictions of its DFSA licence.
This document constitutes a Financial Promotion and is directed exclusively at Professional Clients, as defined in the DFSA Conduct of Business (“COB”) Module.
It is not intended for Retail Clients and must not be distributed to, relied upon by, or acted upon by any person who is not a Professional Client. Any person who is not a Professional Client should disregard this document.
The information contained in this publication is provided for general market commentary, information and discussion purposes. It does not constitute:
• personalised investment advice;
• a personal recommendation based on a recipient’s circumstances;
• an assessment that any investment or strategy is suitable for a particular recipient;
• a transaction-specific offer to buy or sell any financial instrument; or
• an agreement to provide any Financial Service.
This publication presents market analysis and investment views. It should not be treated as independent investment research. Its description as marketing material does not exclude any applicable regulatory requirements concerning its content, preparation or distribution.
Any references to “Astero Falcon”, “we”, “our”, or similar expressions represent the Firm’s market views and opinions as at the relevant publication date only. Such views are based upon information available at that time and may change without notice. References to investment opportunities, purchases, asset allocations or strategies do not establish their suitability for any particular recipient and should not be the sole basis for an investment decision.
Any forecasts, estimates, targets, projections, expectations or other forward-looking statements contained in this publication are based on assumptions and market conditions which may change or prove inaccurate. Actual events or market outcomes may differ materially. No representation, warranty or assurance is given that any forecast, projection, target or expected outcome will be achieved. Historical patterns and technical indicators may not recur or accurately predict future market movements.
References to historical performance, market trends or statistical information are provided for context and illustration. Past performance is not a reliable indicator of future results, and future performance cannot be guaranteed. The value of investments and any income derived from them may rise or fall, and investors may lose some or all of their invested capital. Market and index performance figures do not represent returns achieved by Astero Falcon or any particular client portfolio.
This publication has been prepared without taking into account any recipient’s individual investment objectives, financial situation, risk tolerance, tax status or particular needs. Before making any investment decision, recipients should undertake their own assessment and obtain independent legal, tax, accounting and financial advice where appropriate.
Investing in financial markets involves risks, including but not limited to:
• market risk;
• liquidity risk, including an inability to sell an investment when required;
• credit and counterparty risk;
• foreign exchange risk, which may increase or reduce investment returns;
• interest-rate risk;
• operational risk;
• geopolitical and regulatory risk; and
• partial or total loss of invested capital.
Private-market investments may involve lengthy holding periods, restricted transferability and uncertain valuations. The existence of a secondary market does not guarantee an exit or the ability to sell an investment at its stated value.
Digital Assets / Virtual Assets
References to cryptocurrencies, digital assets, virtual assets, crypto tokens or blockchain-related products form part of the market commentary and investment views presented in this publication.
Such references do not imply DFSA endorsement or establish that Astero Falcon is authorised to provide Financial Services relating to those assets. Any such service would be subject to the relevant regulatory permissions and requirements.
These assets may be subject to extreme volatility, reduced liquidity, cyber security and custody risks, technological failures, valuation uncertainty, market abuse and substantial or total financial loss. The regulatory treatment and protections applicable to them may differ by asset, activity and jurisdiction.
Information contained in this publication has been obtained from sources believed to be reliable, including Bloomberg and other third-party providers, together with Astero Falcon’s internal analysis. Third-party information may contain errors, be revised or become outdated, and its accuracy, completeness or continuing currency cannot be guaranteed. Nothing in this publication excludes or restricts any duty or liability that Astero Falcon owes under legislation administered by the DFSA or any other applicable law.
Astero Falcon, its directors, officers, employees, affiliates or clients may hold positions or have interests in the financial instruments, securities or markets referred to in this publication and may buy or sell such investments, subject to applicable requirements. This general disclosure does not replace any specific conflict disclosure required by applicable law or regulation.
Any potential engagement with Astero Falcon or the provision of Financial Services remains subject to:
• the scope, conditions and restrictions of the Firm’s DFSA licence;
• compliance with applicable DFSA legislation;
• internal approval processes;
• client classification requirements;
• Know Your Customer (KYC) and Customer Due Diligence requirements;
• Anti-Money Laundering, Counter-Terrorist Financing, sanctions and proliferation financing controls; and
• execution of appropriate legal documentation.
Distribution of this publication may be restricted by the laws or regulations of certain jurisdictions. This publication must not be distributed where doing so would contravene applicable requirements. Recipients must observe any restrictions applicable to their receipt, use or onward distribution of this publication.
No part of this publication may be reproduced, copied, transmitted, distributed or published, in whole or in part, without the prior written consent of Astero Falcon, except where permitted or required by applicable law. Any permitted onward distribution remains subject to the Professional Client restriction above.
Astero Falcon (DIFC) Limited
Office 33, Level 7, Gate Village 10, Dubai International Financial Centre, Dubai, United Arab Emirates
Email: info@asterofalcon.com
Website: www.asterofalcon.com
Chief Investment Officer: Elena Nefedova
© 2026 Astero Falcon (DIFC) Limited. All rights reserved.
14