October 2014

Volatility to rise, say canaries

Michael Hartnett, Chief Investment Strategist at BofA Merrill Lynch Global Research believes investors will have to face lower liquidity, the end of excess returns and the end of excessively low volatility. He says that poor performance in the four classic “canaries in the coalmine” – commodities, emerging markets, high yield bonds and small cap stocks – in the past 12 months indicates an inflection point in global liquidity and the end of zero interest rate policies.

DAX enters reversal

Investors in German equities are in denial, according to Edward Loef, CEO of Loef Technical Analysis and former senior technical analyst at Theodoor Gilissen Bankiers . Since the DAX hit an all-time high in summer, the technical picture has changed considerably.