Split decision: Making sense of market divergence

Divergence within asset classes exists across many markets. It has been present in loans for a while and is now in equities and areas of the credit market. Within equities, strengths and weaknesses in sectors reflect a classic rotation: more defensive or value‑tilted segments are holding up, while growth and mega‑cap tech cools. Investors are becoming more sensitive to valuation and are less willing to pay indiscriminate costs for long‑dated growth. Credit markets show a similar split, with higher-quality loans in demand and distressed options avoided. Whilst artificial intelligence (AI) is...