Below is a chart and brief excerpt from today's Early Look written by Macro analyst Christian Drake.
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In the beginning of June, I was the recipient of all sorts of pointed sarcasm for suggesting the latest pro-cyclical rotation was, once again, more head fake than harbinger. That harrowing short-term, counter-trend move ultimately fizzled, breathing fresh life into the duration infatuation and all its variant equity expressions. I also offered a gentle reminder that markets remain under homeostatic, self-regulation. As we’ve seen time and again, too far-too fast in rates dead ends in growth concerns and ultimately feeds back to the growth/earnings outlook in equities, short circuiting the reflation optimism that catalyzed and propagated the move to begin with. |
