Less Conservative

The US stock markets have consistently reached all-time highs, driven by the strong performance of AI-themed stocks with robust fundamentals. While valuation expectations previously influenced the US market, recent fundamental data has reassured investors, leading them to be less conservative despite the central bank’s prolonged high benchmark rates. Striking a balance between maintaining stability by curbing inflation and avoiding a severe recession is crucial for the central bank.

On the other side of the Atlantic, European equities have also surged to record levels. Despite the Eurozone’s weak economic growth, the unwinding of energy price shocks and the possibility of interest rate cuts by the European Central Bank have buoyed investor confidence. European stocks are currently trading at a significant discount compared to their US counterparts, making them an attractive diversification option for portfolios. We recommend further diversifying investment portfolios with global assets, as they offer promising returns despite high market volatility.