Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Chief Investment Strategist
On the last day of February we wrote a note saying that US equities had entered the dangerous bubble-like levels again. Since then Nasdaq 100 is up another 2% and Nvidia shares up 16%, and all of this is despite yesterday’s hotter than expected US inflation report pushing the US 10-year yield higher and removing one more Fed rate cut this year to now only pricing three rate cuts. There are several factors that are beginning to paint a dangerous picture of the US equity market and not least technology stocks:
As we have repeatedly been saying investors should begin tactically reducing their US technology exposure due to increasing warning signs in the market of toxic speculative behaviour. Strategically for the long-term investor we like the US technology sector, but in the short term things have gone too far. These are some of things an investor could consider: