Danger As Interest Rates NO LONGER A MEASURE OF SYSTEMIC RISK!

First let’s jump right into this chart here, which Zhedge posted this week and one we mocked up a bit to paint a clear and precise question, that is, who is right, equities or bonds? If the correlation in May wasn’t obvious, it is now, with quite a large negative divergence:

Stock Bond Divergence

What is driving this divergence? The market sentiment has changed quite dramatically as investors are banking on the FED’s reversal of hiking course and now will embark on a rate cut...

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