Deutsche Bank: “Path Of Least Resistance” Is For Everything To Rally
You'd be forgiven for throwing in the towel on trying to understand exactly how to reconcile the inexorable rise in equities, the resilience of EM, and the weak dollar with what's supposed to be a Fed tightening cycle.
Yes, Trump and some members of his inner circle have tried to jawbone the dollar lower at various times this year and yes, the administration's seemingly intractable Russia problem has led the market to price out Trumpian reflation (e.g. bull flattening and a weaker greenback),
Aren’t these the same guys who just said Gold is overvalued…..OK, maybe it is, but Gold is dirt cheap relative to stocks, bonds and the Euro.
The underlying macroeconomic logic in the DDM precludes prolonged negative real interest rates. The initial FED logic in supporting the system assumed that the underlying system growth could be revived in fairly brief time intervals. That led to statements like QE infinity, and other poetic rephrasing of realities like economic failure. To add insult to injury, if the real culprit is a dynamic called concentration of wealth, and if FED policy has excaberated that dynamic, then where are we going now?. Armstrong has been saying it pumps the DOW to 40,000. There is no law against PE expansion, but there should be.