The markets appear to be conveying drastically different assessments of the growth outlook, leaving investors to decide which view will prevail
With the first quarter of 2022 over, the U.S. stock and bond markets appear to be conveying drastically different assessments of the growth outlook, leaving investors to decide which view will prevail.
Illustrating the countervailing forces in markets, the CBOE Volatility Index - viewed as a gauge of fear in equity markets - stands not far from its lows of the year, with investors pinning the reversal in stocks on everything from quarter-end rebalancing to buying from retail investors. At the same time, the ICE BofAML MOVE index, which tracks Treasury yield volatility, remains elevated.
Such an inversion is concerning because it has preceded six of the seven recessions since 1978, according to data from Truist Advisory Services. Some investors, however, have given a broad range of reasons why the signal’s predictive power may not apply this time, including the potentially distortive effects of the Fed’s massive COVID-19 stimulus on rates markets.
“We would take this rally as a sort of a gift,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. “If you weren’t able to reduce your exposure to some of the speculative areas of the market before the correction, now is your time.” That’s a sign there is still room for the Fed to shift gears before the market starts to price in a recession, said Gary Cloud, a portfolio manager at Hennessy Funds.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Funds drive surge in end-of-quarter rallies, research suggestsThe volume of assets in U.S. target-date funds has jumped to almost US$3-trillion today from less than US$8-billion in 2000
Read more »
‘Mystifying’ U.S. stock rally defies economic uneaseInvestors are questioning how long the surge can continue in the face of a hawkish Federal Reserve, warnings of recession from the bond market and geopolitical uncertainty
Read more »
Trulieve Cannabis posts 24% jump in fourth-quarter adjusted core profit as demand surgesTrulieve, which operates in 11 U.S. states, said fourth-quarter revenue was also boosted by its $2.1-billion acquisition of medical cannabis producer Harvest Health
Read more »
Dollarama to sell products priced up to $5 as retailer sees Q4 profit, sales rise | Globalnews.caThe Montreal-based retailer Dollarama opened 24 net new stores in the quarter, for a total of 1,421 stores at the end of January.
Read more »
Global stocks mixed as Ukraine talks appear to progressEuropean markets opened lower while Asian stocks advanced Wednesday as investors saw signs of possible progress in talks on ending Russia's war on Ukraine.
Read more »
Actor Bruce Willis joins the one million people in the U.S. with aphasiaActor Bruce Willis announced that he was taking a step back from acting after being diagnosed with a brain condition - via healthing_ca healthing healthnews health brucewillis
Read more »