CITIC Securities: High Interest Rates Are a Persistent Phenomenon Until the Inflection Point of the AI Investment Cycle

TREE NEWS update: A report by CITIC Securities points out that stable oil prices, lower-than-expected non-farm payroll data, and reduced expectations of a Fed rate hike cannot reverse the upward trend of global long-term bond yields. The reason lies in the continued strength of private-sector investment demand and fundraising. Thanks to a $1 trillion investment, North America is the first region to escape the “abnormal state” of low growth and low interest rates that persisted after 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, overseas demand that is insensitive to high interest rates is only found in North American AI-related sectors and China’s central fiscal expansion; in terms of allocation, in the short term, one can only respond by focusing on booming industries and industries that have undergone supply-side consolidation, and it is recommended to closely monitor the inflection point of the AI investment cycle.