As BofA notes, the lack of hike is an admission that Wall Street threatens to reverse the recovery on Main Street
- It will lead to a short-term relief rally on Wall Street
- It will be relatively positive for EM/commodities/resources, as it unwinds the higher US growth/rates/dollar narrative
- It will be positive for higher-yielding assets
- It will be positive for growth > value, as the Fed is confirming the deflationary recovery
In short, if the Fed’s failure to hike does not lead investors to completely abandon hope on growth and scurry into gold, cash & volatility...
Which they are.. (note that bonds started moving much earlier)
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Then look for the “barbell of 1999” to reemerge: Über-growth & Über-value were massive outperformers after the Asia crisis
