Intriguing Market Insights from Luke Templeman, Olga Cotaga and Galina Pozdnyakova. Despite being closer to a Fed pause, many rate-sensitive assets are yet to recover. Investors are cautious, perhaps due to last year's rapid drops. But if history is any indicator, any post-pause rally could be swift.
In years like 2023, the latter part of the year tends to be good for equities. Hedge funds, trailing the S&P 500, may make moves to catch up.
In Europe, interdependencies with China are worth noting. Despite recent challenges, we remain optimistic about Chinese markets, with potential catalysts like improved corporate earnings and stimulus on the horizon.
A key concern remains with the lag effects of rate rises impacting the high-yield debt market. [more]