I am short on time this weekend, which is probably a good thing given that I have really struggled to share the excitement over last week's events. We had the swoon of the S&P 500 and its first 1% daily decline in more than <insert number here> days on Tuesday. Overall the index had temerity to post a 1.4% decline on the week, the biggest fall since the first week of November. It was with a tinge of embarrassment that I watched the overreaction of my fellow equity investors on both sides. For the bulls, this was the buy-the-dip of a lifetime and for the bears it was the signal that the bull market had come to an end. In truth of course, it was evidence of neither, although I suspect that the bulls will be the ones sleeping with most unease.
Read MoreGlobal equities continue to mock the bears. The MSCI World was up 2.6% on the month in January, comfortably outperforming yours truly, which had to contend with 1%. The MSCI World is now up a cool a 8.1% since November, and while we saw faint signs last of weakness last week, it was really only a minor flesh wound for the bulls. Indeed, Friday's NFP number was a real treat for everyone. A solid headline and a poor wage print equal goldilocks and joy for both bond holders and equity bulls. As so often before, Spoos and Blues carried the day.
Read MoreI am in New York this week to see clients and prospects, which is why I haven't yet had time to say much about Mr. Trump snatching the prize or the crazy market moves that have followed. I don't see much change . The espresso in Murray Hill, served by Chinese immigrations, is exquisite as ever and New Yorkers remain notoriously impatient, and bad, drivers. I do notice a big increase in TV-ads for Range Rover and Jaguar, though, so maybe there is a concrete sign of the alleged rapprochement between the U.S. and the U.K. in the aftermath of Brexit and Mr. Trump's victory.
Read MoreLast week was docile compared with the fun and games we were treated to earlier this month; no imminent Lehman moment at a major European bank and no flash crash in the GBP or other G4 currencies. Still, we had a number of interesting moves in the major asset classes and indices. The continued squeeze in yields probably was the stand-out move. Starting with the benchmark, the U.S. 10-year yield broke range and a move to 2% is starting to look like a good bet in my view. For once, it appears that can we apply relatively plain-vanilla macroeconomic narrative here. Inflation in the U.S.—and indeed globally—is nudging higher and the Fed intends to act accordingly. The slightly more cynical interpretation is that the Federales are desperate to get another hike in before the end of the year, but that underlying fundamentals haven't really changed that much.
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