Author: Just Summit Editorial Team
Source: J.P. Morgan
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The AI capex boom is currently winning the economic tug-of-war against geopolitical strains, supporting growth and corporate profits. This resilience underpins a constructive outlook on equities, with a preference for the U.S. and Japan due to strong corporate fundamentals and AI exposure.
Attractive opportunities also exist in U.S. high yield for its carry and in high-yielding currencies, capitalizing on low volatility. Global bond yields are appealing, particularly a long duration position in Europe, where market pricing of ECB policy is seen as too aggressive relative to growth risks.
What to watch next includes the trajectory of Middle East conflict and its impact on oil prices, and potential shifts in the Bank of Japan's policy given hawkish U.S. Treasury influence. The article flags uncertainty around the sustainability of energy price containment and the ultimate path of U.S. interest rates.
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