The recovery has been very fast and furious. I would say too fast and too furious. Volatility disappear all of the sudden. And for a week now there has been a calm…bit like a middle of the storm.
Two things are different from January…the Reserve Banks intervention and the US buy back are back on the table.
The Reserve Banks intervention was good but it is following the path of diminished returns. They almost exhausted the ammo.
Corporate buy back are the chat of the week. They are the biggest buyer of US equity and pretty much the last one.
Quite difficult to explain the intricacy of it in a fast blog. But essentially the companies do not know what to do with the money so they use the debt market to buy their own stock as there is no better allocation. But when the Fed raises the interest rates…there are better allocations. At the moment or the US companies return to real growth…or they will tank. Watch out.
investorpolitico 