CPR Invest - Climate Action Euro - I EUR - Acc ISIN : LU1530901146

Wind power is one of the clean electricity production technologies, just like solar. While Europe has lost the industrial war over solar panels, which are overwhelmingly dominated by Chinese companies, this is not (yet?) the case for wind turbines. However, the figures are clearly in favor of China: the country alone installed 120GW of wind capacity in 2025 (70% of global capacity), while Europe installed only...20. And the leading player, Goldwind, installed 30 on its own compared to just 14.5 for Vestas, the leading European company.

The question of sector consolidation arises, as scale effects are crucial in these industries, whether in research and development or in the leverage on profitability provided by the maintenance of installations. This is all the more pressing as the price gap between European and Chinese products in unprotected markets can reach up to 40%, and the race for scale is a matter of profitability and efficiency. For this consolidation to occur, Europe will have to abandon its diktat in favor of consumers and start thinking in terms of global market share rather than just European.

Who said that summer was a quiet period on the stock market?

The month of July ends on a broadly unchanged note, but the underlying movements have been very significant: from a macroeconomic and geopolitical perspective, the situation in Iran has once again deteriorated, leading to a new surge in oil prices with consequences for inflation. The ECB and the Fed have reached the same conclusion, not raising their rates (this time), but the market has interpreted the two meetings differently: Kevin Warsh initially managed to convince the markets of his willingness to control inflation and raise rates if necessary, contrary to the mandate set by President Trump, but this meeting and internal disagreements have created doubts about his real intentions, which has caused US rates to rise sharply. Inflation is not helped by the new tariffs imposed by the US president. At the same time, as the Japanese currency continues to depreciate significantly, the end of the month saw the first massive joint intervention by the US and Japanese central banks to support the yen. China, for its part, is still facing a sluggish economy, but is advancing its export strategy, especially towards Europe and emerging markets, and is positioning itself against the United States in AI.

Equity markets are not to be outdone: for several months, the AI theme, associated with considerable investment spending, has been driving the market as well as all derivatives related to the implementation of data centers and connectivity, from electrification to power generation and specialized real estate. The market has exaggerated this trend, to the point of creating leveraged ETFs on individual stocks in Korea, allowing retail investors to speculate with leverage on what seemed to be an endless rise in prices. As trees do not grow to the sky, the essential question of the expected profitability of these investments has finally arisen. Given their scale, profitability seems distant, while China is beginning to deploy open-source models and circumventing US sanctions on technology exports by working to develop its own capabilities, from chips to lithography machines that were thought to be the preserve of a few Western or Korean companies. The sharp reversal in sentiment has cleared out speculative retail positions and led some specialized funds, such as Situational Awareness, to forced sales and near-bankruptcy before being acquired by Citadel.

In this shifting environment, earnings releases are living up to expectations: US stocks are delivering positive surprises, hyperscalers continue to generate impressive cash flows, and overall, for the second quarter, the growth in already announced results in the US will be close to 30% and 14% median, and companies remain optimistic about their outlook.

The MSCI EMU ended July down 0.6%, despite the rebound in energy (TotalEnergies +12.3%, Eni +16.3%) and reassuring financial releases (BBVA +10.7%, ING +10%, Intesa +9.2%). It is mainly the technology sector and all stocks linked to the semiconductor value chain that are dragging the index down: ASML (-16.6%), Infineon (-24.5%), Nokia (-30.9%), Nebius (-31.5%) or STM (-29.2%) illustrate these profit-taking moves.

Over the month, CPR Invest Climate Euro fell by 2.2%, penalized by all sectors except communication services. The rise in the oil sector, in which we are absent, profit-taking on electrification and renewable generation, and the decline in technology stocks explain most of the correction.

During the month, we significantly reduced our exposure to semiconductors (STM, Infineon) but returned to ASML after the correction, sold our position in BMW to reposition ourselves on Valeo, whose products could be used in data center cooling, strengthened excessively penalized electrification stocks after the correction (Prysmian, Schneider, Siemens), and diversified our investments by increasing our exposure to financial stocks (Santander, Intesa, SG), defense (CSG), or utilities (Iberdrola).

We often talk about the evolution of the energy mix, the growth of electrification, and the contribution of renewables to electricity production. China remains the largest emitter of greenhouse gases, due to its size, population, growth, and industrialization. In a bid for geostrategic independence, the authorities have long bet on renewables and nuclear, and their efforts are starting to pay off: in the first half of 2026, the share of coal-based electricity production fell below 50% for the first time, to 49.7%, for 2.5tr kWh. Meanwhile, renewables saw their production increase by 16.8% to 1.2tr kWh, nearly a quarter of electricity production. This is good news for the climate, even though much remains to be done.