ECB gave all they had today (rate cuts/QE/credit purchases) but price action screamed “Quantitative Failure”…gold and volatility outperformed.
Risk assets about to top: ultimately markets about “rates” and “earnings”, little else; central banks have played “rates card” as aggressively as they can; ECB done, BoJ has nothing in the tank, and any US macro strength will elicit Fed rate hike expectations (the Fed wants to tighten); EPS momentum simply not strong enough near-term to overwhelm Q2 risks of Brexit, BoJ failure, US politics, China debt deflation.
There remain good investments, e.g. gold, US IG, defensive growth stocks in US, dividend yield in EU/Japan, “global peripheral debt” (i.e. EM debt), the “long Main St, short Wall St” theme, “best of breed” in EM (buy the best assets in the worst places); but near-term risk-reward in assets markets once again looks poor.
This article is brought to you courtesy of Tyler Durden From Zero Hedge.