Franklin Templeton Stays Bullish on Equities Despite Inflation Concerns
Franklin Templeton Investment Solutions remains optimistic about global equities heading into August 2026, driven by strong corporate earnings and an AI-driven portfolio tilt. The firm believes that market expectations for earnings-per-share (EPS) growth above 20% for global and US equities and as high as 35% for emerging market equities provide a compelling 'risk-on' case.
The asset manager notes that earnings breadth has improved materially in the United States, reducing the market's previous over-reliance on a narrow group of technology stocks. However, inflation remains a key complication, with core Personal Consumption Expenditures (PCE) inflation at 3.3% in June 2026, well above the Federal Reserve's 2% target.
Franklin Templeton retains an artificial intelligence tilt, with overweight exposure to the US, Japan, and emerging markets. The firm argues that while AI hardware trades saw some volatility in July, the underlying adoption story is intact and less-crowded positions now look more attractive at lower valuations.