Trump, Recession, Divergence: What’s Next for U.S.?

The video discusses the trends in fund flows, highlighting a shift from equity to bond funds, and the impact of Trump's victory on these trends. It analyzes sector performances, particularly bond proxies like utilities, and the potential for underperformance as bond yields rise. The discussion also covers the risks of a recession as a trigger for ending bull markets, with a focus on unemployment rates and economic growth. Finally, it examines how rising bond yields could tighten monetary policy, potentially leading to a recession by affecting investment and consumer spending.

What has been the trend in fund flows between equity and bond funds in the USA and Europe?

• Money has been flowing equally into both equity and bond funds.

• Money has been flowing into equity funds and out of bond funds.

• Money has been flowing out of equity funds and into bond funds.

• There has been no significant change in fund flows.

Which sector is considered a bond proxy and has benefited from low volatility strategies?

• Consumer Discretionary

• Utilities

• Healthcare

• Technology

What is a common trigger for the end of bull markets?

• Political instability

• High inflation

• Recession

• Technological advancements

How does the US economy's sensitivity to interest rates affect its growth?

• Interest rates have no impact on economic growth.

• It is more sensitive to short-term interest rates.

• It is equally sensitive to both short and long-term rates.

• It is more sensitive to long-term interest rates.

What could be a consequence of rising bond yields in the US economy?

• Lower mortgage rates

• Higher investment by companies

• Increased consumer spending

• Stymied housing market