INSUBCONTINENT EXCLUSIVE:
A $10 trillion global stock rally is showing signs of fragility, and you can blame the economy.
Both the American and European benchmarks
once a trade deal with China is reached, stock declines were a sign that after a sharp two-month rally, risk appetite has weakened and the
bar for positive surprises has been raised.
Reality is starting to bite
Riskier stocks are falling back to Earth
Investors are pulling money from equities and pouring it in bonds
And trend-following quantitative funds are cutting their US equity positions.
Blame macro
deteriorating economic picture has become harder to ignore
support the market, but once the deal has been announced with all details, market participants will re-focus on PMIs and corporate earnings
Transportation Average, which fell for an 11th consecutive session Friday to cap its longest streak of losses in 47 years
Because they form the infrastructure on which commerce is conducted and provide clues about the strength of the economy, weakness among
trucking companies, shippers and airlines is often viewed as an early-warning sign for the broader market.
Adding to the fragility of this
In Europe, economically sensitive sectors are underperforming again as yields fall
In the US, factors associated with strong risk appetites have also started to drop, with both the volatility and leverage styles headed for
After the monetary authority said it will hold record-low rates at least through 2019 and grant new loans to banks, stocks initially rose,
property and the Made in China 2025 program, Goyon said.
Meanwhile, investors have continued pulling money away from equities and putting it
in bonds, further reinforcing concerns that the rally will buckle as inflows reverse
