This Correlation Just Hit A Record High, But Goldman Says Don’t Worry About Financials

This Correlation Just Hit A Record High, But Goldman Says Don’t Worry About Financials

To be sure, one could argue that the financials are actually holding up quite a bit better than they should be holding up given the flattening in the curve we've seen since the post-election reflationary euphoria. The CCAR results helped, earnings (by and large), didn't. But another thing that's not helping is the macro backdrop - specifically, the extent to which turmoil in Washington (i.e. the policy agenda getting continually delayed) and lackluster incoming data has weighed on 10Y yields
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One thought on “This Correlation Just Hit A Record High, But Goldman Says Don’t Worry About Financials

  1. Nobody seems to get it, but a flattening yield curve means we are not in recession, and a steepening means recession and’or increased inflationary expectations.

    8+ years into recovery, the next big steepening will probably mean recession…..not good for banks.

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