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Barclays cautions that climbing interest rates on government debt are eroding the value proposition of holding stocks.
The bank points to the equity risk premium sitting at levels last seen decades ago, a metric that measures the extra return investors demand for taking on stock market risk over safer bonds.
This shift raises a straightforward question for holders of shares: can current valuations hold up when the benchmark for safe returns rises?
While Barclays acknowledges that corporate profits remain resilient and that artificial intelligence is driving growth, it identifies specific threats to that stability.
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