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A markets mystery has perplexed some analysts this year: Why are stocks sitting near all-time highs while the global economy is rocked by geopolitical conflict and inflation pressures?
Financial firms serve as the backbone of the economy, providing essential services from lending and investment management to risk management and payment processing. Still, investors are uneasy as companies face challenges from an unpredictable interest rate and inflation environment. These doubts have caused the industry to lag recently as financials stocks have collectively shed 4.6% over the past six months. This drawdown is a far cry from the S&P 500’s 11% ascent.