Corner of Wall & Main: Buybacks Trouble

By

Chris Versace and Lenore Hawkins

 | Jul 02, 2014 | 2:00 PM EDT
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History may not repeat itself, but it does rhyme and the tune these days is becoming increasingly reminiscent of the ultra-low volatility and complacency of 2007. Despite increasing inflationary indicators, the markets appear quite convinced that any tightening by the Fed is highly improbable, with any eventual action being only the slightest brake tap.

All major asset classes are up on the year, even those that are typically inversely correlated, making for the broadest rally since 1993. This brings to mind another song from the past of prolonged Fed easing after a real estate and credit crash. That tune as well came to a rather abrupt change after unanticipated Fed tightening the following year. The most recent Bank of America Merrill Lunch poll of institutional investors reports that a net 48% are overweight equities, despite 15% believing that stocks are overvalued. Then there was Sunday's bomb....785 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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