Equities for recoveries, bonds for crises?
The stock market is at its highest, while bond yields are not very far from the floor recorded 3 years ago. Equity markets enjoy economic recoveries, and bonds performs well during recessions, see crises. Do these two markets therefore give contradictory answers to the question of whether the world economy is at the end of the cycle? We will see that it is not so. And that the world economy is doing rather well, although it is showing signs of abating, especially in Europe. The good news of these failures in the engine of growth is that central banks are slackening their monetary policy, to the delight of investors in financial markets.