We see no disconnect between record U.S. equities and high oil and yields: Markets are pricing both AI-driven growth and the Middle East supply shock.
U.S. equities hit record highs last week, while oil and yields stayed elevated - reinforcing our view that markets are differentiating the shock’s impact.
U.S. inflation data this week will test still-firm price pressures, with implications for yields as markets assess the risk of further rate increases.
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Transcript
U.S. equities are hitting new highs even as the Strait of Hormuz remains effectively closed, deepening supply chain disruptions. We think markets are pricing in both an AI-driven earnings boost and the impact of those disruptions - not
