Beware The Dead Cat Bounce: “Exuberant Markets Can’t Escape The Shadow Of Negatives”

Jon Government

Treasury yields have erased the knee-jerk losses from retail sales, Nasdaq is now tumbling, and gold is bouncing…
This is not the market we saw yesterday that was relieved that the world had not ended and Bloomberg’s macro strategist Mark Cudmore is worried that it’s not over, warning that “exuberant markets can’t escape the shadow of negatives”
Via Bloomberg,
Risk assets have rallied sharply so far this week but there are sufficient flaws in the positive narrative to argue that the bears will likely inflict further pain on impatient bulls. On Monday, the S&P 500 Index had its best day in more than three months. With U. S. stocks the flagship risk asset, that good mood has spread across markets. I argued a week ago that the global market outlook had turned much more negative, so the strength of the (expected) bounce has taken me by surprise.

This post was published at Zero Hedge on Aug 15, 2017.