NO ONE. I mean (NO ONE) ever saw rates moving higher here. The dollar yields and expectation. ALL analysts and brokerage firms factored in 3 rate cuts for this year spurring exciting big earnings gains. Why else are we at a dangerous P/E level today? The call was unanimous as they explained the laws of physics demanded rates drop. In fact they gave thousands of reasons why it is impossible to have inflation ever again.
BUT ME!
It is now on a trajectory that suggests at some point, perhaps 10 year approaching 5 percent where any drop will be exaggerated, and stock rally assured. That is until more accumulated data shows not only a stubborn resistance to lower inflation but an actual acceleration. I can't harp enough just how full proof a crash is when everyone sees the world with tinted glasses. I have looked for years to find anyone expecting danger for higher inflation. Found NONE! That makes for a crash. Like a known Pandemic that the science gets completely ignored and comes to a shocking conclusion AFTER there is ONE DEATH Like electing TRUMP completely excusing his criminality and INSANE stance.
I can spend an eternity trying to understand human behavior at the extreme but will fail ever time. I can only shake my head and conclude we are self-destructive.
How big was Powells announcement? Monumental. Like the world labeling the virus as a runaway Pandemic. How likely will the street heed the implications? All we have to do is wait. One week, two, three? If we just see a normal correction here and a multi-week rebound the answer is simple. We stay in a pocket of irrational exuberance. Even if rates and the dollar keep defying their desire for it to steady or go lower. You are now witnessing the MOTHER of ALL PAST MANIAS.
Maybe we continue this slide for another week and then resume a slow and steady rebound? A faster one? A sideways move? DO NOT KNOW!
But I can assure you we are NOT in the FIFTH WEEK of a PANDEMIC just yet. This mega move has legs, and such an insane valuation takes time for everyone to wrap their heads around the immediate consequences dead ahead. DEAD AHEAD! An arbitrary concept. The longer the mega bull run arguably from 40 years ago the more likely the sledgehammer would have to strike 2 or even 3 times before they realize they are dead. Maybe i got this all wrong being so cynical.
NAH!
