The equity rally’s next test of wider participation

AT THE International Monetary Fund (IMF) and World Bank meetings in Bangkok last week, I came away with a clear impression – that the global economy and financial markets have held up far better than many feared.

Energy and food security concerns, elevated public debt burdens and the disruptive questions posed by artificial intelligence continue to dominate discussions, but growth has stayed resilient. This assessment is entirely consistent with the Lombard Odier house view.

The recent rise in bond yields is undoubtedly uncomfortable for equities, but we see no single level at which a bull market automatically ends. A US 10-year yield above 5 per cent raises the hurdle rate for risk assets and increases financing costs, particularly for smaller and more leveraged companies.