With geopolitical tensions continuing to escalate, there's a tendency by participants and pundits alike to fit the headlines to the tape.
U.S., Europe Stocks Decline, Treasuries Rally on Ukraine
Don't.
While these events have certainly not hurt demand, the respective trends in both Treasuries and gold have been in place all year and under what we believe are more endogenous and cyclical motivations - than event driven reflexes at the whim of Putin, Hamas or Israel. From our perspective, the same holds true with the recent cracks in the US equity markets, which we view as an obvious - but latent reaction, to the Fed slowly ending their policy support this fall.
Generally speaking, we've approached the broader macro picture in the US equity markets from the top down bearings of the long-term 10-year yield cycle and the proportional trends of Shiller's P/E ratio - which we have described in previous notes (see here ) as sharing close parallels with the cyclical peak in equities in 1946. Although the trend in equities did extend further than we anticipated at the start of the year, similar market and policy conditions still exist that hold strong congruencies with this historic time period. This perspective remains supported by: