Send me real-time posts from this site at my email

Stock-to-bond returns and macro surprises

The trust in central banks to continue to keep policy rates far below the natural interest rate and stand ready to save the equity market with more QE if needed currently feels everlasting. Central banks are forcing investors into equities and credits, no doubt, but we doubt they will assume any responsibility when the potential bubbles burst.

The high sensitivity of bond yields to negative surprises has, however, also meant that long government bonds have outperformed global equities since the end of Q3 2018. Apart from the virus period, the most vicious outperformance of bonds has, as always, occurred during periods of negative macro surprises.

Stock-to-bond returns and macro surprises

Welcome!!! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue