Most European indexes are negative YTD in local currency and DJI turn negative for the second time this year.
Currently the market is expecting higher rates and it seem we are going to get them. There is a general believe that periods of increasing rates are bad for most equites but my research shows the contrary.
On the other hand, that are sectors that should clearly underperform the main indexes
Fed raised interest rates by 0.25% as expected. However, there is a hawkish tilt in projections for 2019 and 2020. In plain English, this means that interest rates may go higher in 2019 and 2020 than expected.
In our analysis, 2019 and 2020 are too far to make any firm projections. All the economy must do is weaken slightly and interest rate projections will go down.
MTD FLOWS are not supportive of US Equity Prices.
In North America we had-21Bn in Equity and +41Bn in money markets
In Europe the picture is negative for Money Markets -39Bn
Asia positive for Equities +7Bn
The ES futures went to print to negative territory YTD once again.
Last time this happened about 70Bn exited the US stocks within minutes. Today the VIX is not high enough for panic to kick in. If we get to 2650 bears can become aggressive and buyers might have to lower some risk