Nothing works, not large or small cap stocks in the United States, not international or emerging stocks, not Treasuries, quality bonds, commodities or real estate. Most of them are down, and those that are up are doing so by percentages below single digits.
It is anything but unique in history. Normally, when something falls, something else wins. In the midst of the financial catastrophe of 2008, treasury bills rallied. In 1974, raw materials were a glimmer of hope. In 2002, it was the REITs. In 2018, there is nowhere to go.
Clissold has a villain: the evaporation of the central bank stimulus.
“Markets have raised concerns about how asset prices would handle the removal of ultra-relaxed monetary policies,” said Clissold, chief U.S. strategist at Ned Davis Research, in a note released last week. . In previous episodes of market turmoil, “there was a bull market somewhere.”
The Federal Reserve has raised rates eight times since 2015, and policymakers in Europe and Japan are slowly ending their accommodative programs. This, along with concerns about global growth, has soured investor sentiment across the board.
This week, optimism about a temporary truce in the US-China trade war proved short-lived as Brexit worries about a flattening of the yield curve and slower global growth. have settled in. On Tuesday, the S&P 500 Index posted its fifth decline of more than 3% this year.
All in all, the S&P 500 index was up 1% for the year and US investment grade debt fell 1.6%. Developing country equities fell 12%, while the Bloomberg Barclays Long Term US Treasury Total Return Index was down 6.4%.