Weekly Investment Focus

  • Equity indices have reached pivotal levels in most developed markets, especially in Europe
  • Since the end of the global financial crisis, interest rates worldwide have been at historically low levels
  • The recent rise in bond yields could disrupt some investors, who see this as a risk to the equity markets
  • Since the early 2000s, the correlation between the two main asset classes (bonds and equities) is positive
  • If the 10-year bond yield was to exceed 3.5%, the risk of a contraction in stock markets would become significant