Epsilon Theory Professional
For the first time in weeks, the recessionary fearfest narrative is now declining, not growing. And that means Treasuries will have a really hard time working, no matter what happens in equities.
All of the heartfelt prayers to the Fed gods went unanswered last week. Or rather, the answer was “No.” And without a Fed backstop to US-China negotiations (where the narrative continues to worsen), we are immersed in technical uncertainty.
The Street is beating the recession narrative drums, culminating in Friday’s sharp sell-off in US markets. But there’s a chance for Powell to save the day, by shifting the Fed narrative to provide a market backstop to US-China trade disputes.
Ben’s weekly summary of the week that was in financial markets for the week ended December 7, 2018.
The market is not a clockwork machine, even though we all think it is. No, the market is a bonfire.
Some of our terminology, exhibits and analyses may not be immediately intuitive. We’ve assembled a short guide to help you familiarize yourself with the Epsilon Theory frameworks.