The Black Hole Revisited

The Black Hole Revisited

Remember "the black hole?" Late last month, Wells Fargo put out a truly amusing piece called "Passive Is The New QE." The premise was that passive flows are acting like QE for U.S. stocks. Here's what Wells wrote: As QE seemed to exaggerate trends in the fixed income markets, so it appears that Passive equity flows are exaggerating stock movements. Recently we’ve observed consistent net inflows to Passive Equity funds, which have morphed into a type of Black Hole. Money goes in and stocks ne
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