CITIC Securities: High Interest Rates Are the Persistent Norm Until the AI Investment Cycle Inflection Point

TREE NEWS reports: A CITIC Securities report notes that stable oil prices, weaker-than-expected nonfarm payroll data, and downward revisions to expectations for Federal Reserve rate hikes have all failed to reverse the rise in global long-term bond yields, underpinned by persistently strong private-sector investment and financing demand. Driven by $1 trillion in investment, North America has been the first to break free from the “abnormal state” of low growth and low interest rates that followed the financial crisis, and the global high-interest-rate environment is a persistent phenomenon that must be addressed until the inflection point of the AI investment cycle. According to the report, demand that is insensitive to high overseas interest rates is confined to areas related to North American AI and Chinese central fiscal expansion; on the allocation side, in the short term the only viable response is to focus on booming sectors and sectors where supply has been consolidated, and it recommends closely tracking the inflection point of the AI investment cycle.