Biggest change in the investment climate since financial crisis
NEW YORK (Scrap Register): The US dollar has soared and some of the biggest changes in the investment world since the Great Financial Crisis have occurred since Donald Trump won the U.S. presidential election, said Brown Brothers Harriman.
Since the U.S. election, the dollar has been on a tear. Pullbacks have been brief and shallow. Analysts pointed out that the euro has fallen nearly 5% over the past 10 sessions. U.S. 10-year yields have fallen once in the past two weeks.
Above 2.30%, the yield is at its highest in nearly a year. The S&P 500 is within 0.3% of its record high set in mid-August. However, many market observers are cautioning that investors are getting ahead of themselves.
Analysts pointed out that a Federal Reserve rate hike next month has already been factored into markets. Like all politicians, and perhaps even more so given his irreverent campaign, the extent to which Trump fulfill his campaign promises is unclear.
Moreover, Trump often was seen campaigning against Republicans in Congress, many of whom do not share his commitment to fiscal stimulus.
These concerns fail to appreciate the watershed that is taking place. It appears that the three-decade secular decline in bond yields may be over. This is important and has far-reaching implications. At the very least, we are experiencing the biggest change in the investment climate since the Great Financial Crisis, BBH added.