Anticipate Turbulence
The market has spoken. Fears over AI and high oil prices have shaken stockmarkets this week. It was not unexpected.
US Bonds vs Equities since 1973
While the AI stocks have come under pressure, the market isn’t down much, at least not yet. More importantly, bonds have rallied. This is good news because it implies that investors still seek sanctuary in bonds when things go wrong. It means a full-blown bond crisis is now less likely than we feared a few months ago.
US Bonds vs Equities - Past Year
Within the stockmarket, the rotation has been monumental. Safe quality stocks with low volatility have rallied, while speculative, high-beta stocks have been hit.
Low Volatility vs High Beta
The price of oil seems to be well underpinned, which worries investors because it will negatively impact growth. Gold is under pressure. I hope you saw my latest Atlas Pulse, which looks into this in more detail. Gold is vulnerable in the short term, but the longer-term case seems to be well underpinned.
Gold and Oil
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