Market Roundup
Key takeaways
- Markets remain calm after the Fed hiked rates and indicated further hikes are likely. However, the market had already priced in far more hikes than the Fed’s own forecast. We expect these hawkish fears and treasury yields would subside over time.
- Growth equities tend to outperform during periods of elevated rates and resilient economic growth.
- Concerns over safety may have limited impact on AI development, due to a lack of strong will to regulate the industry. Investor attention may shift from hardware towards application and other growth areas, such as cyber security and healthcare.
- The breadth of market gains has narrowed, which may signal more demanding investors on earning progress.
- Attractive yields continue to support fixed income, with investment-grade bonds preferred, as credit spreads remain historically tight.
