The new debt red lines for the Stock Exchange
Equities are resisting the debt onslaught near its records, even with levels above 5% in US bond yields. Analysts are now incorporating the key structural change that allows them to raise the estimated critical levels for the Stock Exchange.
JPMorgan analysts believe that the current 5% interest rate on US debt is not a critical threshold for the stock market. Despite traditionally being seen as a barrier, the S&P 500 has recently hit record highs with US 10-year bond yields above 5%. JPMorgan suggests that a change in the global economy, driven by sectors like AI, healthcare, and services, means that the critical threshold for stocks could be significantly higher, potentially between 5.5% and 6.0%.
Other analysts, such as those at UBS and Invesco, also see a changing landscape, with UBS noting that rising bond yields are driven by positive factors and Invesco warning that sustained high yields could still lead to stock market declines.
Written by urgent.news from Expansion ES's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
