Market Outlook

Key Takeaways

Long-term bond yields are being driven by real interest rates. As the "denominator" is repriced, valuation expansion is narrowing, making equity returns increasingly dependent on actual earnings delivery.
U.S. corporate earnings remain robust. The year-end target for the S&P 500 has been raised from 7,870 to 7,980, maintaining a bullish outlook on the AI theme.
Rising expectations for U.S. rate hikes and higher long-term bond yields will have a greater impact on local Hong Kong stocks, particularly in the real estate, utilities, and conglomerate sectors.

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