Equity markets remain in a bull phase, sustained by a persistent shift in capital flows out of fixed income. Investors, lacking viable alternatives for long-term capital preservation, are increasingly gravitating toward equities. This trend is compounded by the significant refinancing risks facing corporations that relied on low-interest debt for decades. While many businesses now struggle with higher interest expenses, large-cap tech firms with net cash positions remain resilient. Meanwhile, the broader macroeconomic landscape faces potential instability if energy prices surge, which would likely trigger further sell-offs in the treasury market and tighten liquidity. Despite ongoing concerns regarding a potential recession, the economy has demonstrated unexpected strength, though diversification remains essential for navigating current market uncertainties.
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