Equity markets kicked off the week on a strong note, rebounding from previous weeks' sluggish performance, particularly within the mega-cap sector. Notably, Alphabet Inc. saw gains following reports of Apple's discussions to integrate Google's Gemini artificial intelligence engine into the iPhone.

Investor attention is keenly focused on the U.S. Federal Reserve's upcoming monetary policy announcement and economic forecasts, set for release on Wednesday. Investors do not expect a rate cut this week, but are anxious to see if the Fed maintains its projection of three interest rate cuts in 2024, amidst slower-than-expected inflation decline.

Despite concerns, stock markets have soared to new highs, reflecting investor confidence in corporate earnings surpassing worries about increasing interest rates. However, the uptick in long-term Treasury yields points to underlying market unease, with worry that the Federal Reserve could adjust its neutral rate estimate upwards. Such a move could signal a shift towards a "higher for longer" scenario, potentially affecting both bond and stock markets adversely.

Large and Mid Cap stocks are rebounding from their recent slump, with the Energy sector emerging as this week's standout performer, according to Newton. Following Energy, the Materials and Healthcare sectors are also showing significant improvements. In Fixed Income, Floating Rate debt is showing a signs of strengthening, while Corporate Debt is lagging.