AI earnings shield US stocks, but bond risks rise: Jefferies' Wood
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓US equities stayed strong this year, helped by earnings growth from the AI capital expenditure cycle, said Jefferies strategist Chris Wood.
- ✓However, rising bond yields now pose risks to stocks.
- ✓"The stock market has historically done relatively badly going into the mid-terms whereas that has not been the case."
Story at a Glance
- Category
- MARKET
- Reported By
- The Economic Times
- Reading Speed
- 7 Minute(s)
- Market Focus
- India Economy
Synopsis
US equities have largely remained strong, aided by robust earnings growth driven by the AI capital expenditure cycle. Rising bond yields and geopolitical tensions, however, are beginning to impact investor sentiment negatively. Analysts are concerned about the sustainability of the AI capex cycle and its expected returns. Additionally, there is a realization that G7 government bonds are entering a structural bear market.
Mumbai: US equities have largely shrugged off rising bond yields and geopolitical tensions so far this year, helped by strong earnings growth fuelled by the AI capital expenditure cycle, said Jefferies global equity strategist Chris Wood. Still, the bond market is now reaching levels where the risks to equities are growing, most particularly with the US Federal Reserve turning more hawkish, he said in his newsletter Greed & Fear.
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The Economic Times
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