Almost exactly 7 months after it last hit a record high, the S&P 500 has surged off last week’s ‘Turkey crisis’ dip on China trade-talk headlines and broken to a new record high – despite collapsing yield curve and dismal economic data.
2872.87 was the previous high…How appropriate that we hit a new record high right as stocks reach the longest bull market in history.
Spot The Difference…
US Macro data has done nothing but disappoint in recent weeks, but don’t let that stop the buying panic…
The Treasury yield curve (2s10s), however, is trading at 22bps – its flattest since August 2007…
And the last three months have been led overwhelmingly by Defensives…
What happens when the China trade talks end with no result?
Believe…
Investors start the week in a pretty good mood. The bet is that Turkey’s woes won’t spread; that China blinked just in time; and that Powell will sound dovish this Friday.
— David Rosenberg (@EconguyRosie) August 20, 2018
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