Turns out not even hawkish saber-rattling by the Federal Reserve is enough to awaken stock investors from the spell cast on them by artificial intelligence.
Passively managed equity funds are on the cusp of marking a milestone that’s been more than a decade in the making: Globally, net assets in such products are about to exceed those of their actively managed counterparts, according to Societe Generale.
One of many things to break in last year’s market rout was a decade-long stretch in which gains in stocks overwhelmed gains in wages.
Behind closed doors, Federal Reserve policy makers worry rallying markets are impeding their efforts to control inflation. But every time Jerome Powell goes out in public he gives them more room to run.
Call them brazen, call them naïve, but stock investors are giving no sign of being daunted by the hottest inflation in decades or the accompanying surge in bond yields. Their boldness has sent analysts in search of ways to explain how the S&P 500 Index has managed to rally in five of the last six sessions, even as the Federal Reserve promises higher rates while war rages in Europe and Treasury rates see the biggest two-day jump in two years.
It may turn out that five new special purpose acquisition companies per day was too many.
A group of investors who correctly timed the stock market’s bottom in March isn’t bargain hunting yet during the current selloff. Instead, they’re stepping up sales, flashing an ominous signal to any dip buyers.
As the likelihood of additional federal stimulus fades, U.S. stock investors are returning their focus to the coronavirus pandemic and not liking what they see.