The Warning Still Stands - But Something Has Changed
The risks I warned about last week have not disappeared. But the market has just passed two important stress tests far more calmly than logic suggested it would.
In this update, Garry Davis explains what changed, why the feared chain reaction did not unfold, and why the next step is to rebuild exposure only as the market provides positive evidence.
The quarter-point rate moves in the US and Japan could logically have produced a far more disruptive reaction. Instead, the key rate differential barely changed, credit markets stayed calm and equities absorbed the week without major damage. That does not remove the risks around bonds, the yen and the carry trade - it means the feared chain reaction still lacks confirmation.
Meanwhile, US corporate earnings remain strong and the AI trade continues to produce evidence of real demand, pricing power and improving returns. The practical response is not to regret earlier risk reduction or rush back in, but to use cash and partial positions to rebuild exposure on positive evidence and tolerable weightings.
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Any advice in this video is general advice only. Neither your personal objectives, financial situation or needs have been taken into consideration. Accordingly, you should consider how appropriate the advice, if any, is to those objectives, financial situation and needs, before acting on the advice. Garry Davis (AR No:317590) is an authorised representative of Primary Securities Ltd (AFSL No. 224107).
Note to traders* The publishers of this material wish to disclose that they may hold stocks mentioned in their portfolios and that any decision to purchase those stocks should be made only after the purchaser has made their own enquiries as to the validity of any information in this material.
Past performance should not be taken as an indicator of future returns.
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