As winter turns to spring, around the world investors are anxiously watching the present spasm in global equities and bonds and asking themselves whether the bears of the financial markets are finally waking from a long hibernation.
We think not. To us, a correction of the sort seen in recent days was overdue and a jump in volatility along with this sort of adjustment in equity valuations was just a matter of time. The pretext and triggers were, and remain, less important – stretched valuations in equities often find their own triggers for such an upset.