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Big Banks Are on Steroids: Market Recon

"In the information economy, collaboration is the ultimate currency." -- Amy Blankson

Enforced Rotation

Yields have been on the rise this week, and not just domestically. Bond markets across the planet have spent the last few days in selloff mode. That said, sovereign debt has actually found some support in this morning's trade. As the quarter ends, some traders are probably wondering if equity markets will see some of the customary window-dressing that all assumed had started to work its way into the price discovery mechanism way back on Wednesday. In recent days, we've heard Janet Yellen (Fed), Mario Draghi (ECB), Mark Carney (BOE), and Stephen Poloz (BOC) pound the table. All have spoken on reducing current levels of accommodation. Remember the "taper tantrum"? Now put such a market condition on the global stage, and it becomes easy to understand what has happened to bond markets this week. Now, think of coordinated normalization as the cause. Think of higher yields as the effect. Then think of enforced rotation as the equity market result. Now you know what happened to your portfolio.

Of course, broad talk of tightening monetary conditions across the...