Euphoric equity markets or bearish bond investors – which will be correct?
Witold Bahrke, senior strategist at Nordea Asset Management, examines the sustainability of the recent stock market rally. Bahrke believes that while equities have rallied and bonds have showed strong returns, bond markets will perform better long-term. He notes three headwinds for equities: reflation, the end of easing monetary policy and that risk assets are already pricing a heroic growth comeback. While risk assets may run for a little longer, the bond market is likely to win out in the end.