SEB: Investment Outlook: Higher growth and inflation rates
Signs of higher growth and inflation rates, along with hopes of support from fiscal policy initiatives, will form a solid basis for rising corporate earnings. So far the stock market has interpreted these developments in a positive way. The fixed income market is affected differently, since rising yields hurt returns on bonds with longer maturities. For corporate bonds, this may be offset by the fact that credit spreads are favoured by prosperous businesses. If this stronger trend persists, we should also have reached the peak of aggressive central bank support. This will affect the