Is There a Disconnect Between US Equities and the Economy?
Since February last year, economic growth conditions have clearly deteriorated in the US, as highlighted below by our proprietary US Growth Nowcaster. In the meantime, given the change in the Fed’s rhetoric, US equities have continued to rally, posting a solid return of 14% year-to-date. If previously (2015-2017) good news were good news, at the beginning of this year bad news started to be good news for markets, giving the impression that whatever the economic conditions, US equities can keep on posting positive returns. Is this a temporary disconnect or a more permanent feature reflecting central bank activism?
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