Previous Reports
A straw that breaks the camel’s back
Strong nominal growth and surging corporate profits - driven predominantly by AI investment - are solid pillars supporting the bull market. As a result, investors are increasingly willing to ignore negative developments and risks to the bull market. This has significantly weakened the ongoing rally from within, and it wouldn’t take much for prices to fall…
Betting on a perpetuum mobile
The bull market is increasingly reliant on the expectation that the AI boom will continue and lead to structurally higher profits and economic growth. Rising real interest rates threaten to undermine this assumption, with major negative consequences for asset prices and the economy. The US government is therefore attempting to prevent a further rise in long-term yields.
More broadly based growth could (slightly) extend the life of the bull market
Equity prices of AI-related companies are increasingly showing signs of a late-stage bubble, but that does not necessarily mean the bull market is already over. Falling energy prices and downward pressure on long-term yields could provide broader support for growth and risk assets. At the same time, risks are mounting beneath the surface. In this report, we analyse the key tipping points and their implications for our tactical allocation across equities, bonds, commodities, property and gold.
