Why Are Equities Not Hating the Current Setup? | Macro Mondays w/ Andreas Steno & Mikkel Rosenvold

Rising bond yields and the impending inversion of the yield curve signal a potential slowdown in the business cycle, as short-term interest rates climb relative to long-term yields. While the AI infrastructure build-out currently masks the restrictive nature of these high rates, broader economic sectors face mounting pressure from tighter credit conditions. Historical analysis indicates that yield curve inversions do not trigger immediate market crashes, though they necessitate a focus on quality companies with proven earnings growth rather than speculative ventures. Meanwhile, geopolitical stability remains fragile; despite recent diplomatic efforts between the United States, China, and Iran, the underlying risks surrounding trade relations and energy supply chains persist. Navigating this environment requires careful hedging against potential volatility as the market adjusts to the reality of sustained high-interest rates and shifting global trade dynamics.