Livewire Q&A | Five market shocks are colliding. Here's how to invest through it
The following was published by Livewire, 9th June 2026 | Author: Chris Conway
Broken correlations are creating opportunities. Here are the themes, trades and risks Fulcrum is focused on now.
To say there is a lot going on in markets right now is an understatement. Whilst investors are accustomed to dealing with multiple issues at the same time, the number and diversity of forces impacting markets today are extreme.
Geopolitical risk, an energy shock, trade wars, resource nationalism and stagnant productivity are colliding with structural themes such as artificial intelligence, which is already reshaping capital expenditure and has the potential to influence labour markets, inflation, energy demand and market concentration.
The challenge is not simply that there are more risks to consider. It is that many of the relationships investors have historically relied upon are becoming less predictable.
To explore what that means for portfolio construction, I spoke with Fulcrum Chief Investment Officer Suhail Shaikh about the firm's Diversified Absolute Return strategy, which invests across macroeconomic themes, asset classes and time horizons, with exposure to equities, fixed income, currencies and commodities.
As Shaikh puts it, "currently, there is an abnormally high number of shocks affecting markets simultaneously."
Taken together, he argues, "the result has been correlation instability, not just between equities and bonds, but also between other asset classes, such as the US dollar and commodities, most notably oil and precious metals."
In the following Q&A, Shaikh explains why he believes markets are underestimating several key macro outcomes, including the potential for oil and gold to rise together, an AI-driven equity market melt-up, and a subsequent energy-induced correction.
He also discusses opportunities in emerging markets, the role of options in today's environment, and why some of the most compelling opportunities can be found when traditional correlations break down.
Please note that the views expressed in this Q&A were current as at 28 May, 2026
The market is getting oil and gold wrong
One of Fulcrum's highest-conviction views today centres on a relationship many investors assume should not exist.
Shaikh believes markets are underestimating the possibility that oil and gold could rally together over the coming quarters.
"We believe that there is a significant chance that both oil and gold move higher in tandem over the next few quarters, reversing the current negative correlation."
The thesis reflects a world in which geopolitical tensions remain elevated, energy markets stay tight, and investors continue to seek safe-haven assets. Rather than viewing oil and gold as competing expressions of different macro outcomes, Fulcrum sees a credible scenario where both benefit from the same forces.
Importantly, the portfolio is expressing much of this view through options, allowing it to participate in potentially large upside moves while limiting downside risk.
AI could fuel both boom and bust
Artificial intelligence has already become one of the dominant themes in global markets, but Shaikh believes investors may still be underestimating the magnitude of the opportunity and the risks that could follow.
"We believe that the market is under-pricing the chance of an AI-led equity market 'melt up', followed by an energy-induced crash."
The view stems from the enormous investment flowing into AI infrastructure and the possibility that the demand for power, data centres and related infrastructure creates pressure elsewhere in the economy.
Rather than attempting to forecast the precise timing of these developments, Fulcrum is positioning for the possibility that markets experience both phases of the cycle.
For Shaikh, options markets currently provide an attractive way to express those views because they offer substantial upside while limiting the amount of capital at risk.
Positioning for escalation without betting the ranch
The Middle East remains one of the key variables driving markets day to day.
According to Shaikh, investors are currently operating in a highly binary environment, with sentiment swinging rapidly between expectations of escalation and de-escalation.
Rather than making a large directional call, Fulcrum is maintaining exposure to scenarios that could benefit from either outcome, while retaining a modest bias towards escalation risks.
"Given the inherent uncertainty and unpredictability, we maintain exposures that should benefit in each of the scenarios, with a mild balance towards escalation risks versus de-escalation risks."
That positioning remains dynamic and can shift as events evolve. The goal is not to predict geopolitical outcomes with precision but to ensure the portfolio remains resilient regardless of which path markets ultimately take.
Looking beyond the obvious opportunities
While much of the market remains focused on the United States, Fulcrum is also finding opportunities in areas receiving considerably less attention.
Shaikh points to opportunities in emerging markets including Hungary, Brazil and India, alongside thematic exposures linked to Asian semiconductors, consumer weakness and the long-term increase in defence spending.
The common thread is identifying opportunities where market pricing does not adequately reflect the underlying drivers.
Many of these positions are deliberately idiosyncratic, providing additional diversification and helping reduce reliance on any single macro outcome.
What could derail the outlook?
Shaikh is quick to acknowledge that every investment approach has vulnerabilities.
For Fulcrum's discretionary macro positions, one of the more challenging environments would be a prolonged period of falling volatility, limited market trends and elevated correlations across assets. Such conditions reduce the breadth of opportunities available and can make option-based strategies more difficult to monetise.
Even so, the portfolio is designed to withstand periods where individual components struggle. As Shaikh explains:
"Generating attractive uncorrelated returns over the long-term is difficult and requires a highly diversified process grounded in theory, which is executed by experienced portfolio managers and involves a certain degree of complexity."
For investors navigating an increasingly uncertain world, that commitment to diversification may prove more valuable than ever.
This is general information only and does not take into account your personal objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances and read the Product Disclosure Statement (PDS) and target market determination (TMD) on our website. Fidante Partners Limited ABN 94 002 835 592 AFSL 234668 is the responsible entity and issuer of interests in the Fulcrum Diversified Investments Fund