Capital Markets 1Q26 Update

US Interest rates are starting to fall, but high long-term risk premiums are keeping long-term yields stable. As a result, bond returns are coming mainly from interest income and holding bonds over time, not from rising bond prices.

Stock markets are no longer led by just a few big companies. Instead, gains are spreading across different industries and company sizes.

AI is entering a stage where infrastructure is in the spotlight. Companies’ profits and valuations now depend more on storage, electricity, and power grid capacity.

In Asia, countries are moving in different directions. China is supported by government policy but still faces problems in real estate. Japan is doing better thanks to higher interest rates and stronger corporate governance, which is helping its market improve more steadily.