It’s always easy to find things that can go wrong for risk assets, but it’s seldom easy to find this many. The Chinese economy looks ever more precarious; political tensions in the Middle East are rising and the election cycle in many democratic countries is set to bring uncertainty. Equity markets feel crowded, particularly in AI-hype stocks, which have pushed the S&P 500 up more than 18% over the last three months; corporate default rates are rising with weaker-than-usual recovery rates; and equity markets have surged higher still since the start of the year despite bond markets pricing a more sober route through rate cuts than initially hoped for in the giddy days of December.

Read Man’s The Early View January 2024