With the S&P making new all time highs on a daily (and hourly) basis, and the VIX just why of all time lows, one has to look hard to find something that is amiss with the “market.” Which is precisely what SocGen’s Andrew Lapthorne did recently, and in his latest report he warns that global indices hitting all time highs is “disguising an underbelly of trouble.”
Laphtorne notes that global equity markets continue to move higher, with both the MSCI & FT World Indices hitting all-time highs last week and the S&P 500 specifically hitting a new closing high on Friday. So all would appear to be rosy in the equity market with the consensus promising higher EPS growth in 2017 and bond yields remaining reasonably well behaved despite higher headline rates of inflation and a very slightly more hawkish tone from the US Federal Reserve.
However, the SocGen strategist warns that if one scratches below the surface of these headline numbers and all is not as it seems.
First example: out of the 1,650 MSCI World stocks only 246 have hit a new all-time high this year.
This post was published at Zero Hedge on Feb 21, 2017.