The COVID variant getting the blame for the sell-off in risk assets.
Pundits seem to be forgetting that risk assets peaked in early November (after strong CPI print) and the selling has intensified since Fed's taper announcement.
Market has been deteriorating for weeks.
Pundits seem to be forgetting that risk assets peaked in early November (after strong CPI print) and the selling has intensified since Fed's taper announcement.
Market has been deteriorating for weeks.
Thanks to unprecedented QE, ecommerce + payments + software + video games and streaming stocks benefited tremendously during the pandemic (their valuations were a lot lower then).
Conditions are very different now - Fed is tightening and valuations are also a lot higher.
Conditions are very different now - Fed is tightening and valuations are also a lot higher.
Important to ignore the hype + think critically.
Over past year, we learnt about a few COVID-variants but the financial markets largely ignored them because of the Fed's QE program ($120b/month).
Now, a new COVID-variant is rocking risk assets. Why? The Fed is now tapering.
Over past year, we learnt about a few COVID-variants but the financial markets largely ignored them because of the Fed's QE program ($120b/month).
Now, a new COVID-variant is rocking risk assets. Why? The Fed is now tapering.
Myth -
Fed's QE suppresses UST yields and its end causes them to surge
Reality -
Fed's QE has always caused UST yields to rise (animal spirits/bullish outlook on the economy) and its end has caused them to decline (return of deflationary fears)
Pays to check popular BS
Fed's QE suppresses UST yields and its end causes them to surge
Reality -
Fed's QE has always caused UST yields to rise (animal spirits/bullish outlook on the economy) and its end has caused them to decline (return of deflationary fears)
Pays to check popular BS
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