Global equities are likely to trend higher over the next three months
- U.S. stocks possibly playing catch-up to other markets
- medium-term outlook is less certain
Near-term upward bias is supported by a resilient macro backdrop and muted fallout from recent tariffs.
Balance of risks worsens beyond the Q3:
- with equity markets already near their highs, recession risks appear largely priced in
- leaves the foundations of US market outperformance potentially weakening
Longer-term concerns include
- elevated U.S. valuations, which could come under pressure if Trump intensifies tariff-focused policies
- also signs global capital may be rotating out of the US raising questions about sustained equity inflows
Via a note Tuesday from HSBC.
I’m not sure about the “if Trump intensifies tariff-focused policies”, he seems keen to back down.
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In the really short term, the focus is on the May month CPI report Wednesday morning US time (0830 US Eastern time):
- US CPI data due Wednesday, core expected just under 3% y/y
- BofA and Morgan Stanley expectations for the May US CPI report on Wednesday
This article was written by Eamonn Sheridan at www.forexlive.com.
