Despite the ongoing fears of the coronavirus spreading and adverse effect on China’s GDP, financial markets seem immune. Irrational optimism, perhaps?
Stocks and bonds continued to rise, with the 10-year Treasury under 1.6%.
Last Thursday, the Treasury auctioned 30-year bonds at the lowest yield in U.S. history, 2.061%. With $13 trillion of negative-yielding debt worldwide, investors are still chasing yield.
It appears that as long as monetary authorities keep providing the massive liquidity to keep the markets aloft, investors are viewing every decline as an opportunity.
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