LIVE MARKETS-Equities nearing 'boiling point'

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EQUITIES NEARING 'BOILING POINT'

Equity markets have generally weathered heightened volatility in the bond market pretty well, with global equities .MIWD00000PUS less than 2% below all-time peaks, even as bond yields have jumped to their highest in years.

But Barclays equity strategists believe we're nearing the boiling point, with the relative attractiveness of equities lessening as yields rise.

"The 'TINA' argument to own equities looks less compelling," Barclays says, referencing the 'There Is No Alternative' acronym.

With oil prices still above $100 a barrel and global central banks embarking on a tightening cycle that has faint echoes of 2022, risks are rising.

But Barclays is still constructive (just about), even if markets are likely to stay on edge until third-quarter earnings season gets underway in a few weeks' time.

"Growth remains resilient, earnings momentum is still positive, and the economy's sensitivity to higher rates appears lower than in past cycles, leaving us still overweight equities relative to fixed income," Barclays notes.

"But we acknowledge that the balance of risks has become less favourable with rates approaching levels that have historically posed a more meaningful challenge for risk assets."

(Samuel Indyk)

EARLIER ON LIVE MARKETS:

STOXX HEADING FOR POSITIVE WEEK CLICK HERE

EUROPE BEFORE THE BELL: FUTURES HIGHER, OIL EBBS CLICK HERE

WHEN TREASURIES CATCH KOREA'S VOLATILITY BUG, TAKE COVER CLICK HERE