Stocks fell just 200 and breadth was in the range of 35%. This is not the type of action one would expect from the onset of a world war. I would not be surprised to see stocks climb on Monday, as the algos and the dumb money clamor for MOAR. However, if there is a God, a just one at that, he will smite all of you for your greed and for your depravity.
Bible aside, it appears rates are cascading lower again — which is a good thing. During these brief sojourns into “risk off”, fake algos thrust quickly into dollars, and bonds, juke average joes, and then pull the rug leaving them plastered on the floor with excrement falling from their faces. I cannot stress this enough, human beings do not run this market.
That being said, enjoy your weekend and pray to the Digital Gods that some heinous form of false flag operation doesn’t befall you at some public venue, which would undoubtedly energize the base into taking out some more bad guys and sending America’s bravest overseas for a hunting expedition.
May the blood and the coin flow heavily in 2020!
Cheers
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Average joes don’t invest in bonds, they buy stock index funds.
Also, algos can move rates 50 basis points, but a multi-year chart shows something more at work (ie, CBs boosting demand and safety demand from big money).
If you compare US long term treasury rates to other countries, they look way too high. All the PIGS have lower rates than the US, and strong Western coutires (Switzerland, Germany, Japan) already have negative rate.
I’ll bite. What does “too high” imply? How, if at all, do you see the situation resolving?
“Too high” means that their is a mispricing (IMHO) of European bonds vs US.
Since higher rates are bad for “capitalism” and there has been only a small yellow trickle down of inflation into food, energy, and consumer products, the Central Banks will continue to keep interst rates low. So I see this resolving as US rates continue their descent.
Why is this? Is the market stupid? Perhaps you should figure in the cost of hedging currency risk for investors in dollar-based assets as we double down on spending and war mongering policies that cause people to calculate that the dollar is doomed.
You should go blog and lose money with denninger