HKG:2007.HK 11 August 2025

Global stock markets edged higher toward record territory as the week began. Europe’s STOXX 600 rose 0.3% and MSCI’s world equity index climbed within 0.2% of its all-time high reuters.com. Wall Street’s S&P 500 and Nasdaq are hovering near record levels, buoyed by a strong U.S. earnings season and improving sentiment in Europe reuters.com reuters.com. A Bank of America fund manager survey showed investors piling back into big U.S. tech stocks – the “Magnificent 7” – which was named the world’s most crowded trade again as 45% of polled managers went long on giants like Nvidia and Microsoft reuters.com reuters.com. Broad sentiment is improving, with only 5% of investors now bracing for a “hard landing” recession reuters.com and a net 14% overweight equities – the highest since February reuters.com. However, credit markets flashed caution despite the equity optimism. Corporate bond spreads have narrowed to near 27-year lows, pricing in a far rosier outlook than many economists forecast reuters.com. Some major asset managers are hedging against a potential downturn: “We’ve turned very defensive in developed market credit… We have zero exposure in cash bonds and are short high-yield,” said Mike Riddell of Fidelity International reuters.com. Analysts note rising demand for credit