"It's Ludicrous" – The Market Is Losing Faith In Yellen's Promise
By Tyler Durden
While geopolitical concerns and French election uncertainty are factors, The Wall Street Journal notes that many markets are flashing red on growth as investors begin to return to pre-election bets on the ol ‘new normal’ – a persistently weak economic expansion.
There are clear signs that the sugar rush of Donald Trump’s victory and global-growth hopes has faded, raising doubts among some investors about whether stocks can stay high. The sharp drop in government-bond yields is the most obvious signal that something is amiss.
The long-end of the Treasury market curve has practically dismissed any hope of Trumpflation growth…
And the short-end is decoupling too (showing no faith in The Fed’s policy plans)
And as The Wall Street Journal also notes, this weakness is backed up by ominous signs from raw-materials markets, where copper and iron-ore prices have tumbled…
And a swing in leadership of the stock market away from go-go bank shares and cheap “value” stocks to safety-first utilities, real estate and companies with high-quality balance sheets and reliable earnings. All this has come as inflation expectations priced into bonds have fallen and as some weak data has led to downgrades of economic forecasts.
Not everyone is worried…
Nick Gartside, international chief investment officer for