Earlier this month, Moody’s chief economist Mark Zandi warned that even rapid AI adoption may not offset the drag of de-globalisation and structural slowdowns — undermining the belief that productivity gains alone can rescue the cycle. (Business Insider)
A global macro review described the world economy as “limping into November,” with Europe weakening, Asian exporters losing momentum, and U.S. household resilience fading as excess savings deplete. (Investing.com)
And the IMF issued its starkest warning of the year: a “rising possibility of a disorderly global market correction” as real-estate and credit stress accumulate beneath superficially strong asset prices. (Reuters)
The soft landing hasn’t failed — but it is visibly fraying.
Macro Context — The World Is Slowing in Sync
Across all major regions, momentum is slipping:
Europe’s manufacturing slump deepens.
Japan’s industrial output loses steam.
China’s uneven recovery weighs on regional supply chains.
U.S. consumption is softening as student-loan repayments restart and financial conditions tighten.
None of this screams recession. But it challenges the foundation of the soft-landing narrative — a glide path that required stable growth and cooling inflation working in tandem. Today, those lines are diverging.
Current Dynamics — Strong Markets, Weak Foundations
Financial markets look serene. Equity volatility remains low. Credit spreads are tight. Risk appetite is durable.
The fundamentals beneath, however, are not:
The IMF’s correction warning highlights how far valuations have drifted from deteriorating real-economy data.
Corporate and real-estate credit stress is increasing beneath the surface.
Geopolitical fragmentation — from tariffs to export controls to supply-chain realignments — continues raising frictional costs.
And Zandi’s caution about AI overoptimism points to a critical risk: structural headwinds that technology alone cannot offset.
This isn’t an imminent-collapse story. It’s the slow erosion of the assumptions that made a “soft landing” plausible.
Investment Bearings — Positioning for the Slow Landing
Equities: Defensives retain the advantage as earnings quality matters more than top-line growth.
Fixed income: Short duration remains favorable; long duration only works if recession odds rise meaningfully.
Credit: Investment-grade withstands the environment better than high-yield as credit stress creeps upward.
FX: Safe-haven currencies (USD, JPY) gain whenever correction risks flare.
Commodities: Gold benefits from real-rate moderation and geopolitical risk; industrial metals depend heavily on China’s 2026 policy path.
Alternatives: Volatility and tail-risk strategies regain relevance as the cycle loses clarity.
A “slow landing” — sluggish growth, high rates, low visibility — is becoming the dominant macro trajectory for 2026.
Closing Takeaway (Strategic Lens)
The soft landing isn’t gone — it’s just no longer soft. Markets still hope for a gentle descent, but the global economy is navigating turbulence that wasn’t in the original flight plan.
