On May 8th, Johanna Kyrklund, Schroders' global Co-Head of Investment and Chief Investment Officer, stated that if central banks around the world do not achieve their inflation targets this year, the global financial market environment may become more challenging, but she still remains positive on stocks. Regarding bonds, although valuations have improved, the US is not expected to immediately enter an economic recession, so the firm maintains a neutral view on the bond market. In addition, the firm's fixed income allocation focuses on yield rather than expecting negative correlation with stocks or significant bond price increases, despite the recent rise in gold prices, the firm remains optimistic about gold. Johanna Kyrklund mentioned that the current challenge facing global stock markets is the excessive concentration in the financial market, leading to imbalances. The stock market has reached new highs, with large growth companies once again driving the market. Therefore, there are concerns about the future trends of the financial markets. However, from a valuation perspective, global stock valuations still remain attractive. Excluding the largest tech stocks, the forecasted P/E ratio for the S&P 500 Index in 2024 is around 19 times, consistent with recent historical levels. The valuations of the US stock market compared to other markets have a significant discount and are lower than the median of the past 15 years. Although overall US stock market valuations are not considered cheap by any metric, the outstanding earnings of the tech "big seven" support their valuations. The current situation is far from the "dot-com bubble" of the 1990s, as investors then focused solely on website click rates and market capitalizations without any corporate earnings support. From a relative valuation perspective, Schroders has a neutral view on mega-cap stocks, as there are no catalysts at the moment to reduce the tech "big seven" holdings, but the firm believes that treating these seven stocks as a whole may not fully reflect the different factors that drive each company's business. The firm prefers to rely on its stock-picking ability to assess the individual risks of each stock. However, as stock valuations outside the US are more attractive, the firm is currently expanding its stock allocation to other regions globally. Schroders has been positive on the Japanese market for some time, as Japan's stimulative monetary policy and continuous improvement in corporate culture are favorable for capital allocation and enhancing shareholder returns. The global recovery in manufacturing is beneficial for European, Asian, and emerging market stocks. In addition, declining inflation could provide a reasonable justification for rate cuts in the US and Europe, which could have a positive impact on valuations, and many emerging economies have already started implementing accommodative monetary policies. It is worth noting that the financial markets have continued to perform well, with 44% of stocks outperforming the MSCI All Country World Index from the beginning of 2024 to date, compared to 34% in 2023. If central banks around the world fail to achieve their inflation targets this year, the global financial market environment may become more challenging, but Schroders remains positive on stocks at present. Regarding bonds, due to the steady US economic data, financial markets have adjusted their rate expectations for US bonds and are now closer to the firm's view of an economic "soft landing". Although valuations have improved, the firm believes that the US will not immediately enter an economic recession, so they maintain a neutral view on the bond market. Schroders' fixed income allocation focuses on yield rather than expecting negative correlation with stocks or significant bond price increases. Despite the recent rise in gold prices, Schroders remains bullish on gold, as it will benefit from global central banks' loose monetary policies and provide a good defensive hedge as inflation is expected to persist longer than anticipated.