David Hay, CIO, Evergreen Gavekal, is worried – as he’s been for the last two years.
During that time he’s believed that a substantial correction was overdue in the US stock markets. Writing in the “Evergreen Virtual Advisor” of October 3, he pointed to the significant change upwards in credit spreads as shown in the chart below:
The chart points to heightened risk averseness in the market (the “ultimate canary in a coal mine”) that coupled with other factors such as the QE wind-up and weak global economic growth, could lead to a replay of the October ’87 crash.
Bull Market: Bond markets are smarter
Bloomberg today carried an article on...
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