Long Strange Trip … February 19th 2020: the S&P and Nasdaq both hit an all-time high as China signals more stimulus for its economy reeling from lockdowns, and investors regain confidence the fallout from the coronavirus will be relatively contained... Well Happy Anniversary everyone, what a long strange trip it’s been! Despite all that’s happened in the interim, the first bullet from that day’s View at Two: “Resilient or Delusional?” wouldn’t seem too out of place today. The latest obstacle for stocks of course is rising bond yields as reflation trade picks up steam, and while Treasuries have continued to sell-off today, US equities appeared ready to come to terms with that to end the week on a positive note. That’s looking less certain now; as the 10-yr yield has continued on to reach as high as 1.36%, the S&P has faded from its high of +42bps just before the EU close to trade in the red (just now back to unchanged). Regardless of where indices finish, the week seems destined to end with the same display of FOMO vs bubble fear uncertainty that’s characterized the dip-buying of the last few days…
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