Only a couple of years ago, central bankers became adept at repairing the damage done to stocks after big shocks. That changed with Brexit, when the strategy shifted to pushing stocks as high as possible before the damage was done… and, still doing all the requisite ramping after the fact.
They perfected the technique after the US election, turning a 5% overnight dump in the futures to a breakout above important resistance — where stocks remain, today.
It made a bold statement — that the market was resilient enough to weather a sea change in the political landscape. This week should be all about proving how resilient it is in a rising interest rate environment. Judging from the mild drop over the past week, investors are quite unconcerned.
Does this make sense, or are investors whistling past the graveyard?
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