Remember when fundamentals mattered? Neither do we, and why should they: the New Normal market has long since stopped pretending to be able to discount a future that is entirely politically driven, and thus irrational, and the only thing that matters is being able to respond as fast as possible to blinking red headlines. This explains the best performing asset classes on November: at the very top, something one would never expect to see - the Nikkei, which soared on "hopes" the return of politician Shinjiro Abe would mean the nationalization of the BOJ, 3% inflation targeting, and a surge in monetization. And while this is good for Japanese equities, it would crush all local banks who hold the bulk of their assets in JGBs, which would in turn plunge, and likely result in another bank sector bailout, no to mention annihilate pension funding for tens of millions. But such is the new normal.
Also at the top: DJStoxx, BTPs, EU Fin Subs the DAX and other European exposure, on hopes Europe's taxpayer is warming up to bailing out the local financial sector, just to preserve the Eurozone, the EUR, and the jobs of various politicians, tightly enmeshed with the future of the failed monetary experiment. Completing the top performers was silver (and Brent) because when politicians are seen as catalysts for market upside, this can only mean one thing: a total collapse of the whole house of cards eventually. And yes, Brent was up there too, due to both eventual inflationary and geopolitical worries. As to the best performing asset YTD? Wheat. It's edible, but deflationary when hedonically adjusted. Or so the Econ PhD's say.
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