ILCB - Weekly Market Pulse: Trading Places

• Stocks are expensive, and people aren’t buying because they want to but rather because they feel like they have to. When people say they are panicking into “the market”, what they really mean is they are panicking out of bank deposits or other safe assets.
• This panicky behavior probably explains some of the recent demand for bonds as well. There has been a general sense of disbelief about bond yields in recent months, as the 10-year yield dropped from 1.75% to the current 1.24%.
• The economic slowdown is obvious in the recent economic releases, but most of them are still positive.

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