FAST FIVE: By One Measure, Investors Have Never Been More Worried About The Future
In reaction to the deteriorating global economic outlook and rising risks to the world economy, central banks around the world have unleashed a coordinated dovish effort to boost growth.
As such, on the surface, markets do not yet seem particularly alarmed about the current situation, with our GFSI Market Risk indicator still in “less stressed than normal” territory.
However, by at least two measures, central banks are failing.
As Bank of America's Benjamin Bowler showed in his weekly Global Equity Volatility report, when analyzed through the prism of the unprecedented recent flight to safety, investors have not been so worried about the future in the thirty years that Bank of America has data on (in other words, on record).
Now in a non-bizarro world, the combination of the S&P trading just 5% below all time highs, coupled with an unprecedented flight to safe assets may have prompted some questions.