Welcome to CoreLogic’s housing market update for December 2023.
The synchronised movement in bond and equity prices has many strategists wondering what is going on - both the bond market and equity market cannot be right about future growth. We provide insights on our favoured asset classes and how best to position your portfolio.
The synchronised movement in bond and equity prices has many strategists wondering what is going on; both the bond market and equity market cannot be right about future growth.
Following changes to our asset allocation recommendations in May, when we increased our fixed income weighting, bond yields around the world have continued to fall, resulting in returns of around 1.4% from fixed income indices. Ordinarily, falling bond yields signal investors are nervous about future economic growth, and are therefore likely to swap out of shares into the safety of government bonds.
Yet, over the same period, the US equity market and the Australian market have recorded fresh post-financial crisis highs, implying investors are optimistic about future economic growth.
One theory that has some merit is that the equity market is being driven higher by yield-seeking investors who are not necessarily expecting much in the way of capital growth.
For further analysis, download the full report:
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