Silvano Marchesi, chief investment officer at Aquila Asset Management, named the bond market as his top concern among rising risks from oil prices, AI valuations and US sovereign debt.
Speaking to Finews, Marchesi said Aquila's portfolio positioning was already oriented toward these risks well before the recent oil price spike. The firm has been tactically underweight nominal assets and overweight real assets — particularly gold — for years, initially due to low real rates and later because of supply-chain disruptions, monetary policy shifts and inflation pressures. "In short, we currently have no direct reaction to the oil price shock in our portfolios," he said.
Marchesi noted that gold positions were trimmed earlier this year following strong outperformance, but the overarching allocation strategy remained unchanged. The firm stays underweight bonds and duration, though he added that if real yields rose sharply alongside clear signs of demand weakness and deflationary risk, duration would again become attractive — compensation for bonds remaining appealing after a decade of very low yields.
On the Middle East conflict, Marchesi called the Gulf-region developments a surprise but said the oil shock rather confirmed existing positioning. He argued the current price reflected both a supply shock and demand weakness, adding: "If demand weren't falling, I think oil could already be at $140 or above."
Regarding calls from Anthropic's Dario Amodei to slow AI development, Marchesi said the critical test rests on two figures: hyperscaler capital-expenditure projections and how those investments are funded. He noted that Anthropic and OpenAI carry very high valuation expectations, while the gap between leading models narrows as open-source efforts and Google advance. If incumbents lose their edge, justifying premium valuations becomes harder.
"What would slow this investment cycle, in my view, are not safety concerns but costs — rising from two sides: financing via higher interest rates, and scarcity of everything a data centre needs beyond chips, from power connections to transformers and cooling," he said. Nvidia's visibility on earnings has improved relative to worries raised two or three years ago, but margin pressure could return if scarcity eases.
He flagged circular financing as his chief concern: when one company invests in another and that company then uses proceeds to purchase the first company's products, "the same dollar is effectively counted twice — once as investment, once as revenue." Should this practice expand to sustain the cycle, it would threaten its sustainability.
On US Treasuries, the 10-year yield recently crossed 5% for the first time since 2023. Gross US interest payments now total approximately $1.27 trillion annually, up from roughly $450 billion in 2021 and growing at about 10% per year. Around one-third of tradeable debt matures within the next twelve months, with another $6 trillion in bonds maturing in 2027 and 2028 that must be refinanced at materially higher rates. The Treasury Department has expanded its purchases of longer-dated Treasuries as yields climbed, and Marchesi expects further intervention before systemic stress materializes. He cautioned against comparing today's nominal yields with 2007 or 2003 levels, noting that high debt combined with high rates is far more problematic than high rates with relatively low debt. The most likely policy response to worsening conditions, he said, would be yield-curve control — the alternative being higher taxes, austerity or default, all politically costlier than inflating away the debt.
When pressed to choose among oil, AI valuations and bond yields, Marchesi chose bonds. "The bond market is different because it changes the rules for all other asset classes simultaneously — it determines the discount rate for equities and the financing costs for AI capex."
