RBC: Equity Markets Vulnerable if Mild US Recession Hits, Sees End to Megacap Dominance

• Equity markets very vulnerable to pullback if mild US recession happens, says RBC • Odds of US recession still around 70% despite predictions of soft landing • Tighter credit from financial institutions impacted by higher rates is a risk • RBC sees reversal of US stocks' decade of dominance as valuations outside megacaps look better • RBC enters 2023 with neutral equity position, higher bond allocation on recession risk