Global Investment Views - May 2023
Wednesday 10 May 2023
Global Investment View
Not a time to change course
The broader equity markets have digested the March turmoil, but the disruption continues to be evident in the US regional banking sector, which is not showing signs of recovery. Bond markets are starting to assess a higher probability of recession in the US and the potential that the Fed may start to cut rates later this year, as inflation tensions look to be slowing. On the earnings front, instead, market expectations remain too optimistic, signaling a disconnect between the recession risks bonds are pricing in and current equity valuations.