Bad News Is Still Good News

| About: Vanguard FTSE (VGK)
This article is now exclusive for PRO subscribers.

Summary

The ECB has started buying corporate bonds.

This has caused some short-term market movements that are likely to fade and reverse.

The central bank omnipotent narrative is still intact but its days are numbered.

This episode of the Market Sitrep kicks off with a look at the ECB's corporate bond buying program. This unprecedented central bank intervention will hurt more than it will help. Next we take a look at Belgian equities (NYSEARCA:EWK) which broke out to new highs and explain why the breakout is probably a false move. We finish up with a discussion of the "bad news is good news" effect. The central bank narrative is still controlling markets, but how long will it hold up?

A link to the pdf presentation can be found here.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.