No One Wants to Remember 1987
So it’s disconcerting to find three references to that inauspicious year in my email inbox.
True, one is from Albert Edwards, the long-time very bearish investment strategist of SocGen.
As for Edwards, he said:
The equity market’s current resilience in the face of rising bond yields reminds me very much of events in 1987, when equity investors’ bullishness was eventually squashed.
And in a further parallel, currency turbulence in 1987 played a key role in exacerbating recession worries for an equity market priced for the start of a new economic cycle.
Just like in 1987, any hint of recession now would surely be a devastating blow to equities.
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For more horror chart porn, we can move on to equities. This is how the Nasdaq-100 has fared so far this year, compared with how the Dow Industrials did from the beginning of 1987.
This is normalized; there’s no trickery with double scales or anything
The illustration above does not prove that the Nasdaq will crash next Monday. Starting points for these charts are arbitrary, and all other conditions may not be the same.
That said, they can spook people. Particularly when, as now, stocks have run into trouble.
John Authers Bloomberg 4 oktober 2023
Those surging bond yields — like being trapped in a car that you know is about to crash, and helpless to stop it.
That’s the view of Société Générale’s sharp-tongued strategist Albert Edwards, who warns of a 1987-style event for stock markets if the bond market does not cool off, in a new note to clients.
“Never in my career have I witnessed such uncertainty about where we are in the economic cycle. Is that long promised recession still lurking around the corner or are we at the start of a new economic cycle? Many investors are apparently increasingly convinced it’s the latter,” said Edwards.
His own view? A recession continues to lurk, but like many others, he’s been holding that view awhile and proven wrong so far
MarketWatch 3 October 2023
Röd öppning 4 oktober
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