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Get Ready. ‘Great Rotation II’ Is Coming, JPMorgan Says
"As you know, people have actually sold equities and put them into bonds this year", Stanley Druckenmiller reminded viewers, during an interview with Bloomberg TV this week.
His point was that despite massive returns for stocks, not everyone has been on board. Part of the problem is that rampant policy uncertainty (exemplified in the on-again/off-again trade war) has kept market participants on edge, even as stocks climbed the proverbial "wall of worry".
Of course, putting money into bonds has
Yeah I’m kind of torn. Forgetting about the macro aspect for a moment, on one hand you have tons of money on the sidelines ready to drive up equity prices, and on the other, equities continue to rally in the absence of meaningful EPS growth with so many investors still on the sidelines. Without even looking at any numbers that indicates stocks are overvalued. But in the absence of a serious macro shock, investors on the sidelines will eventually throw in the towel and start buying. I think we are setup for a serious bubble.
On another note, if a progressive is actually elected, in the short term will be bad for stocks, but redistributing wealth to the masses is really how are you generate economic growth and driving EPS higher. And I’m not talking the financial engineering EPS higher. Real, genuine organic growth. I can only pray this comes to pass.
You mean higher EPS by reducing the ‘S’? Yeah, that’s a problem.
But without the Fed, fundamentals DO matter.
Who says there isn’t inflation? If stocks were a car or health care or food……….
Seriously. When stocks are high, they all want them. When they’re on sale, bye. Illogical.
Who’s left to buy? Smart money’s out. Dumb’s all in. Smart money? Wouldn’t make them that ‘Smart’, but maybe that rotation would set up the big blowoff. Myself, I’ve been betting on the 6 billion folks who aren’t in the US. But I’ve been early. Still getting about 1% more yield than US total market ETF. Rationalizing.
What motivate retail investors to pile in now?