The Pollyanna Stock Market Is Back, But So Are Bonds
The Pollyanna stock market is back. After a quick decline, the USequity markets reversed their downtrend and are nearing highs onceagain.
Investors are still fleeing high-beta stocks for less-volatile sectors,indicating that despite a continuing rise in the market, investors areworried about taking too much risk in their portfolios.
Meanwhile, risk-adverse investors continue to pour money into USTreasuries as the risk of a slowing economy leading to further Fedaction becomes a real possibility.
Market Observations, Deflation Fears and an ARTAIS Update
Last week, the S&P 500 took a quick dive down toward the 50-day moving average as investors became worried about continued poor economic data. While some investors are quick to point to the Boston Marathon attack as the reason for the decline, there was in fact a large decline in the market before the tragedy in Boston occurred.
Last week's string of bad economic data may finally be the tipping point we have been waiting for. For the past few weeks, I have become more and more bearish on the US economy and stock market. Payroll tax hikes, sequestration, and slowing global growth mixed with a euphoria for a rising stock market have pushed the markets into a high risk environment.