Markets ready for goldilocks

Markets are enjoying once again the “not too hot, not too cold” US newsflow, with labor market and inflation figures aligning to validating the continuation of the Fed cutting cycle. Risk appetite (or complacency?) is rising but also concentration, towards the highest quality expensive tech names.An environment still supportive for risk assets, but more and more complex to navigate going forward, as the slowdown in activity may weigh on EPS, and as interest rates risks may resurface. The consensu view of a supportive Fed is still fragile, with uncomfortable inflation figures. We maintain our bullish view for equities (vs bonds) in the medium run, but we believe that the low level of implied volatilities offer a nice opportunity to implement tactical hedges.