Is The 'Counter' Trade On?
Regimes are shifting. Can you feel it? While at the surface, indices tumble along in small ranges and AAPL does its thing, asset-class movements and sector-rotations suggest something is afoot. Since the peak in the S&P 500 last week, we have seen a clear rotation from cyclicals to non-cyclicals, a major rotation from stocks into bonds, and a significant regime change in the relationship between Gold, the USD, and Treasury prices. One thing is clear - the heads-I-win, tails-you-lose high-beta strategy (on the ECB/Fed 'has your back' thesis) appears to be weakening a little (though in 100 milliseconds from now - who knows?)
Since last week's S&P 500 highs, Healthcare is outperforming; Industrials and Materials are underperforming...(among others)...
Treasuries have rallied (yields have fallen) and the USD weakened (though not in a QE-anticipatory way given the above sector rotations)...
as perhaps the strength in Gold is evidence of a rotation from Fiat... (as guessing who moves first in the Draghi-Bernanke game of chicken has become too 'risky')
- advertisements -