Outlook for equities

1. The bond market is the main risk to equities and for all leveraged plays.
2. Central banks are worried that the risks for inflation are on the upside.
3. We do not subscribe to the view that ‘higher interest rates = lower equity prices’4.
The Fed and other central banks have been tightening for the past two-and-a-half years, and global equities have done just fine.
4. As long as the global economy remains robust and central banks stay ahead of the curve (i.e., there are inflationary pressures but not actual inflation), as we think will be the case, we believe that equities should continue to perform well.