While on any given day, stocks may tumble or surge as marginal buyers send increasingly illiquid indices lower or higher on ever lower volume, a more important question is what is taking place below the surface: are large holders looking to offload large exposure (by selling), or vice versa.
For the answer we go to Bank of America, which has models to measure precisely this.
The first time the S&P 500 was at the current levels was early June 2014... i.e. your equity market investment has returned nothing for 19 months.
In the interests of "fair and balanced" reporting we offer the following "Sincere" headline from 2014... making it clear just what to do next.
h/t @StockCats
So you know what to do. Or does the phrase "permanently high plateau" ring any bells for anyone?
On Friday the Bank of Japan implemented Negative Interest Rate Policy, or NIRP.
It is the second Central Bank to do so. The European Central Bank or ECB first went to NIRP in June 2014.
Thus, between Japan and Europe, over 20% of the world’s GDP is being managed by a Central Bank with NIRP.
More importantly, TWO major currencies in the world are now at NIRP while the US Dollar is at 0.5%.
Why does this matter?
Because hundreds of billions of Dollars in capital will be fleeing Japan to come to the US.
Submitted by David Stockman via Contra Corner blog,
This week the great tree of Apple finally stopped growing toward the sky. During its latest quarter, in fact, i-Pad sales were down 25%, Mac volume came in 4% lower and even the i-Phone barely breached the flat line.
As extensively discussed yesterday in the aftermath of the BOJ's stunning decision to cut rates to negative for the first time in history (a decision which it appears was taken due to Davos peer pressure, a desire to prop up stock markets and to punish Yen longs, and an inability to further boost QE), there will be consequences - some good, mostly bad.