Again, this suggests that participants judge that adverse shocks to growth are either likely to have only a modest effect on corporate earnings, and/or that policy accommodation will help to mitigate the effects of any adverse shocks to growth.
However, as seen during the recent ratchetting up in the US–China dispute, asset prices could fall quickly if market participants become more concerned about its potential to weigh on growth of the global economy and corporate earnings. Graph 6  The combination of all of these changes has underpinned a general easing in global financial conditions through the course of this year.