From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
It’s beginning to feel more and more like a risk-on environment out there.
Commodities are ripping higher. Stocks are digging in at critical levels. And defensive assets such as Treasury bonds and the Japanese yen are in freefall.
Despite the market volatility this year, investors continue to be rewarded for buying stocks over bonds. This has been the case for two years now, and there’s no evidence it will change anytime soon.
When we look to our risk indicators and risk appetite ratios, the majority are still stuck in a range. With the stocks versus bonds ratio resolving to fresh highs, we’re thinking the rest may soon follow.
But first and foremost, the price action from this classic intermarket relationship suggests that stocks are still the place to be.
Let’s take a look.