If you look now it looks like a breath of divergence is wafting its way into the market as the usual safe-haven seeking suspects apparently aren't so usual this time around.
The Dow topped at it latest high in late-January and since then, a recent Wall Street Journal article noted, gold, U.S. Treasuries and the Swiss franc have broken ranks by not following the dollar and Japanese yen higher.
It's divergence that, some say, is confusing analysts and investors, pinpointing a sharp reversal from other recent turmoil in the market. To be blunt this has been a market on fire for some time and
change is scary in such environments. The big question is unchanging, however: Is this the prelude to the big correction nearly everyone thinks is more than a day and a whole lot of dollars late?
Unwinding the Federal Reserve's full throttle-ahead monetary spigot is one explanation for investor jitters, some offer. Rising interest rates bode ill for competitive investments like gold and outstanding bonds. And then there's the volatility issue, now perhaps moving from the back to the front burner.
Shadows hide many things and despite recent calm inflation could be one. A recent report noted Washington policy has crimped certain labor supplies, possibly giving existing labor more leverage at the wage bargaining table.
Then, too, trouble in FANG paradise hasn't helped as many investors search for another, new pony to safely ride. The carry trade--borrowing cheap to invest riskier in higher yields--seems to have dried up. See the yen's two percent-plus rise against the dollar since January. Another safe haven, utility shares, have also declined uncharacteristally given past performance.
New computer games come along almost daily. So far we've not heard of any called, Looking Out. However, that might be one investors become exceedingly more interested in if a real market sea-change washes ashore.
No comments:
Post a Comment