Standard Chartered says yields close to topping out, prefers bonds to equities in near term

Rajat Bhattacharya, Senior Investment Strategist at Standard Chartered sees bonds as a better investment bet in the near term globally versus equities.

He believes US bond yields have topped out and the upside is likely to be capped at around 5%. The US 10-year treasury yield has crossed 4.8%, hitting 16-year highs.

"We are expecting a global economic slowdown led by developed economies next year...yields will come off," he said.

While any escalations in the Israel-Hamas conflict need to be closely watched, he highlighted that historically, such geopolitical conflicts from the Middle East have not led to a lasting impact on oil prices.

Crude oil prices have surged by nearly 6% in the past ten days since the start of the Israel-Hamas conflict. Analysts back home are cautious, closely monitoring the situation.

| Why Wood Mackenzie believes oil prices could ease by early FY25

For long-term investors, equities remain the better bet, he said, explaining that India's nominal growth stands at around 12% and earnings growth has historically tracked nominal GDP growth over several decades. He expects that to extend over the next 3-5 years, so valuations don't look too expensive.

For more details, watch the accompanying video