This is the world we live in today: Stocks are priced as if the global economy is booming, while the bond market is priced as if we’re in a worldwide depression.
Nowhere is this truer than in Europe, where stocks are at or near record highs while yields on sovereign bonds are at record lows, below zero in many cases.
Of course, we’re neither in a boom or a bust. While we’re closer to the former in the U.S., we’re a lot closer to the latter in Europe. The bond market in Europe is telling us that the euro zone economy’s in the tank, which is much closer to reality, while the stock market there is now trading at a seven-year high. Continue reading "Are We In A Boom Or A Bust?"