460 Billion Reasons Why Bond Yields May Jump Next Year

By Tyler Durden

460 Billion Reasons Why Bond Yields May Jump Next Year

One week ago, we discussed the ongoing conundrum which has stumped Wall Street strategists, namely the record outflows from equity funds, surpassing even the year of the global financial crisis…

… as stocks hit all time highs, not on earnings growth but entirely due to PE multiple expansion…

… which Goldman summarized by saying that “with S&P 500 earnings on track for roughly zero growth from this time last year, solid returns likely would not have been possible without central bank support.”

We also discussed what JPMorgan thought would finally resolve this conundrum: in his weekly Flows and Liquidity report, JPMorgan quant Nikolas Panigirtzoglou wrote that as a result of the tremendous market performance in 2019 which would finally sucker retail investors in, he expects a “Great Rotation II” as investors finally flee bonds funds and rush to allocate money to equities:

If this view proves correct and the overall cyclical picture looks better over the coming months and quarters, retail investors are more likely to shift from a risk-off mode to a risk-on mode …read more

Source:: Zero Hedge

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