Is the coronavirus the pin that will end the 10 year-long Everything Bubble?
Quite possibly, cautions Sven Henrick, technical analyst and lead market strategist for Northman Trader.
For too many years now, the financial markets have been conditioned that “dips don’t last”. Confident that the Fed will always provide the liquidity needed to push assets higher, investors have come to believe that risk doesn’t matter.
Well, covid-19 is exactly the kind of unexpected exogenous shock that central banks are powerless against. No amount of intervention by the Fed, the ECB or the PBoC will slow the spread of the virus, or force-start factories idle from workers quarantines.
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