Global Markets Recap
Stocks continue to rip higher as symbolic signs of optimism abound – at least on the sports field. Hockey is back or will be soon. They’re playing football & basketball in Florida, Texas & New Jersey; mostly everywhere. If wearing masks, washing hands & social distancing are the Holy Grail of getting the country back to semi-normalcy, I suspect most will be on-board.
Even Mitch McConnell is feeling generous these days, saying more fiscal spending appears likely. Wall Street analysts are predicting negative bond yields over the next 5 years, as low-or-no interest rates won’t go away soon. Cheap money & interminable stimulus checks are a formula equity shorts are beginning to now recognize is exceedingly tough to combat. Money is in the air, and mergers & acquisition deal makers should be extremely busy throughout the year. Capital markets are not only functioning again; in some cases, they are thriving.
The VIX – which measures stock market volatility – is below 30 after trading in the 80s during the height of the panic. If stocks keep catapulting higher, you can set your watch to the VIX falling back into the low teens- the same place it sat for a dozen years post Lehman on benevolent central banks from Tajikistan to Santiago, Tokyo to DC. You know what they say in San Salvador.