A good chart from GS that shows how sectors & factors may react to change in 10Y bond yields.
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This comes as the private credit market faces growing investor scrutiny over valuations, underwriting standards, and rising redemption requests from clients. There is also increasing concern that AI will disrupt the software companies that make up a large portion of private credit portfolios. Historically, the private credit proxy index has had a 94% correlation with high yield credit spreads. If the correlation reasserts, we could see a spike in high yield credit spreads, which could eventually spread into stocks and trigger a bear market. Credit markets tend to lead equities, and right now, they are flashing a clear warning. Source: Bloomberg, Global Markets Investor, Macrobond

