Yesterday, the impeachment took another step towards the Senate, when the House voted to advance the two articles of impeachment to trial.
It’s coming and it’s happening during an election year. This is a very unique time in American politics, to say the least.
There are many moving parts here and it will be truly fascinating to see how the public reacts and follows these issues, at the same time as the Phase 1 deal taking effect and with the president’s economic advisor, Larry Kudlow, PURPOSELY leaking or teasing, as I see it, a Tax Cut 2.0 later this year.
As you can see, Goldman Sachs views this as a time of very complacent behavior on the part of investors, who are not considering any potential loose ends with Iran, on the potential of complications on the impeachment front or backlash from the rollback of Repurchase Operations by liquidity-addicted investors.
You can truly notice the elevated risk appetite, when you look at the low yields that investors are willing to accept when lending money in the junk bonds segment.
It’s back to 2007 levels:
It’s clear to see that people are FEELING GOOD, in general. Investors have their guards down and their radars turned off for Black Swan scenarios.
This doesn’t mean that anything imminent is coming, but what it does tell you is that most investors are willing to pay top dollar for their stocks.
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It’s a good opportunity to scan the portfolio for any companies which may be receiving too much attention, and you can capitalize by taking profits, partially or totally.
Like I said, we live in an era that is dominated by central banks and we must factor that into our thoughts:
Is this a scary-looking chart or what?
There’s no massive war or terrible crisis happening, yet central banks have put a chokehold on markets. In England, Japan, the European Union, in the states and around the globe, there is too much debt (compared with GDP) on the central bank and government level.
These sorts of things don’t unwind smoothly and with the proposed tax cuts later this year, the budget deficits look grim.
No solutions so far; the bubble intensifies.
Research Partner, PortfolioWealthGlobal.com
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