Despite new record highs in stocks, Bloomberg’s former FX trader Richard Breslow fears other markets (the dollar’s downfall, collapsing rates/curves, crashing commodities) have become too “fatalistic” amid the summer doldrums.
Let’s start with some of the things we know with certainty. Yield curves will keep on flattening. Probably invert and drive home the point to everyone that the Fed committed a dreadful policy mistake. The dollar will never rally again. Just look at the numbers and you have to be a U. S. bear. And look how efficiently the latest European bank bailouts were handled this weekend. They really have their act together. Oil? It’s going to single digits, of course. And there’s nothing you can do to stop it or the carnage it will cause in places like Norway and Canada.
It’s summer, markets have a mind of their own and there’s no percentage in fighting the tape.
In fact it’s odd how fatalistic people seem to be. We used to furiously debate where and when we’d find the canary in the coal mine warning of an imminent market reversal to pounce on. Now, there seems to be blanket resignation that the trend is your master.
This post was published at Zero Hedge on Jun 26, 2017.