You can definitely put us in that camp. Seems ever since China started locking away short traders in gulags (not an exaggeration) while the Chinese central bank proceeded to literally buy the Shanghai market to keep it afloat, things have chilled out a bit. In fact many world markets (including ours) have had a nice rally through the often stormy month of October. So now with those pesky “speculators” locked away in a dungeon somewhere and the press thoroughly informed that they had better report official Chinese numbers instead of those oh so annoying “real” numbers, the all clear can be sounded and everyone can take a deep breath right?
(From Yahoo Finance)
Strategists at Barclays also find that the recent market rally has been not been backed up by a outperformance in the economically sensitive “cyclical” stocks. Even as bond markets are no longer pricing in deflation, the defensive parts of the equity markets are the ones outperforming.
“Frustratingly for us, while the overall market continues to closely track the outlook for inflation, style and sector performance has not,” the strategists wrote in a note, adding it was different to the rally in the first half of the year.
“This time round, although we have had the rally in the market, we have not experienced the same pro-cyclical rotation within the market. Strange indeed.”