After months in denial, the market finally acknowledges that the interest rate direction is on the upside. Chief economists from many investment banks abandoned their previous forecast on rate cuts. With the 10-year Treasury yield breaching 5%, the equity market took a dive. As the cost of capital rises, it's sensible to reduce exposure to the financial services sector.
Since this scenario has been discussed extensively in previous blogs, it's time to move on to other less noticed development in the global economy. One possible theme could be country and regional specific development. Stay tuned.