HSBC Sees Risks That Could End Markets' Recent Resilience

According to CNBC, HSBC said several developments could eventually end global markets' recent ability to shrug off shocks, including higher corporate taxes, a renewed rise in private-sector debt, a shift in the stock-bond relationship and a withdrawal of perceived central-bank support. The bank said the biggest risks are in the U.S., where equities, wealth effects and financial conditions are closely linked, and warned that lower inflation could restore the negative stock-bond correlation and pressure valuations. HSBC also said markets have remained remarkably resilient despite inflation, tariffs, geopolitical conflicts, carry-trade unwinding and private-credit concerns, while Deutsche Bank separately said risk assets have stayed resilient even as real rates and inflation pressures rose.