The Financial Market’s Stress Is All About the Dollar
The critical faultline in the selloff has been the sudden strength of the greenback, as banks and investors liquidate assets and scramble for cash.
Everybody wants some.
Photographer: PAUL J. RICHARDS/AFPGood riddance to the worst first quarter in history. But that doesn’t guarantee Spring sunshine and flowers as winter ends. Eminent investors such as Oaktree Capital Group LLC co-founder Howard Marks and DoubleLine Capital’s Jeffrey Gundlach are warning that the worst may not be over. April really could be the cruelest month for equities as a brief bear market rally peters out and the lows are tested again. Until there’s evidence that the worst of the virus contamination is under control, the economy and financial markets are at its mercy.
Fixed-income assets have a tendency to show where equities are headed during crises and yet again U.S. Treasury bond yields are pushing lower, a clear warning of a renewed flight to quality.