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10Y dollar S&P 500 Trump

Behold: The “Trump Trade Fade” In 2 Charts

Suddenly everyone cares about those cross-asset correlations I’ve been harping on since the election.

Just about all I’ve seen headed into Tuesday’s Trump speech is commentary regarding the apparent disconnect in what bonds are saying and what stocks are saying.

Of course this is a theme that’s been playing out for a while now. It’s been readily apparent since… oh, I don’t know… let’s call it mid-December, that one leg (equities) of the reflation trinity has been acting differently than the other two legs (rates, USD).

While Treasury yields and the dollar meandered around and/or drifted lower, stocks continued to push higher, ascending Mount Siegel whose summit is a moving target that gets ratcheted ever higher with each passing green close.

siegel

Well, for all of those people who are suddenly interested in the disconnect between stocks and rates/USD, I present the following two charts from Goldman which illustrate quite nicely what we might call “the reflation trade fade”.

correlations

(Goldman, my big red additions)

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