At the March lows, stocks were discounting the kind of economic collapse we’re currently in the midst of; but the subsequent rally is less about economic optimism, and more about Fed-provided liquidity.
The stock market’s V-shaped rebound is unlikely to be matched by a V-shaped economic rebound.
Longer-term, we will likely see the U.S. economy shift from consumption-driven to investment-driven.
Halloween brought more treats than tricks as November brought the first real S&P 500 break out of its long and volatile trading range dating back to January 2018. Hopes for a United States-China trade deal and ample liquidity courtesy of the Federal Reserve have been in focus; although economic data is not confirming the market’s latest advance. Bulls are saying the market is right and economic data will imminently (or eventua...
“An investment in knowledge pays the best interest.”
― Benjamin Franklin
Sound and fury
While volatility has subsided of late, U.S. stocks remain in a wide trading range and have yet to surpass their July highs. Mixed earnings and economic data; persistent skepticism surrounding a U.S.-China trade truce and Brexit; and monetary policy’s perceived impotence have kept equities around the world from breaking out to...