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Recession Fears Set to Split Stocks and Bonds After Summer Rally

  • Earnings pressure, hawkish Fed may dent stocks: strategists
  • High-grade corporate bonds could extend current gains
Bloomberg business news
Six Charts to Read on Your Summer Holiday

It’s been a summer of love for both stocks and company bonds. But with fall nearing, equities are set to fade while bonds strengthen as central bank tightening and recession fears take hold once again.

After a brutal first half, both markets were primed for a rebound. The spark was lit by resilient earnings and hopes that a slight cooling in rampant inflation would get the Federal Reserve to slow the pace of its rate hikes in time to avert an economic contraction.