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Equities may underperform bonds if earnings falter

As forecasts for corporate earnings in the US finally start to come down amid worries about the outlook for the economy there, this Update considers the implications for equities and bonds.
John Higgins Chief Markets Economist
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Answers to your questions on global markets

We held a Drop In yesterday outlining our latest forecasts for global financial markets. This Update answers some questions that we received during that Drop In but didn’t have time to address. In view of the wider interest, we are also sending this Asset Allocation Update to clients of our Global Markets and FX Markets Services.

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Although the spreads of many “risky” bonds have risen significantly this year, some aren’t currently at levels that have typically been followed by substantial future outperformance of their “safe” counterparts. Markets Drop-In (9th Aug): Chief Markets Economist John Higgins leads this 20-minute briefing on our latest quarterly Outlook reports from our Global Markets, Asset Allocation and FX Markets services. Register now.

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We think the worst is yet to come for most risky assets

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A stock market rebound makes little sense if a recession is nigh

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