However, despite the deterioration in the underlying momentum, asset prices remain near all-time highs as investors remain convinced that Central Banks will continue to “bail them out.”
Furthermore, as I discussed with Evenlyn Chang at CNBC early Friday morning:
“As we have discussed previously, the markets are starved for liquidity. The stronger than expected jobs report, which doesn’t jive with the economic data, paves the way for the Fed to hike rates in June or September.
This is a further restriction in liquidity. Remember, the markets have been rallying on BAD news because it pushes out Fed rate hikes. Good news – is technically bad for stocks at this late stage of the economic and market cycle.”