By Martin Baccardax | The Street
Global stocks turned lower this week as investors hit pause on an impressive spring rally amid new warning signals from the bond market that suggest inflation pressure could remain elevated well into the summer months.
The S&P 500 has printed no fewer than 24 record highs this year, and has powered to a five-month gain of around 11.25%, on the strength of improving corporate earnings, a resilient economy and outsized gains in the tech sector tied to the surge in artificial-intelligence investments.
On the fixed-income side, however, things have been notably dour, with global government bond portfolios down 4.9% for the year, according to data from Bank of America’s ‘Flow Show’ report.
Bond investors are typically the most acutely sensitive to inflation risks, given the nature of fixed income pricing and the arithmetic that defines most of the market’s related products.