Markets barely notice; “Buy the dip.”

 My blogg short index

https://englundmacro.blogspot.com/2025/07/my-blogg-short-index.html

Foreign-policy types talk of an age of unprecedented disorder—and markets barely notice.

Pundits talk of a “polycrisis” running from the covid-19 pandemic, land war in Europe and the worst energy shock since the 1970s to stubborn inflation, banking scares, a Chinese property bust and trade war. 

Yhe global economy powers on. Since 2011 growth has continued at around 3% a year. During the worst of the euro crisis in 2012? Around 3%.

According to the conventional narrative, the great moderation, a period of steady growth and predictable policymaking, ran from the late 1980s to the global financial crisis of 2007-09. But perhaps it did not die alongside Lehman Brothers.

Little wonder that investors are optimistic.

Markets fell in April, when Mr Trump announced his “Liberation Day” tariffs, but quickly recouped their losses. 

Many investors now follow a simple rule when markets decline: “Buy the dip.”

Investors now expect rescue packages at the first sign of trouble, and will keep buying the dip.

The danger is that, in the next crisis, the bill for perpetual protection could come due—and it could be steep.

The Economist 15 July 2025

https://www.economist.com/finance-and-economics/2025/07/15/how-the-economy-evades-every-crisis

The trend is your friend. And then the trend is not your friend.

https://englundmacro.blogspot.com/2024/07/1929-202-trend-is-your-friend-and-then.html