Posted To: MBS Commentary
2014 was marked by a sense of hope that helped both sides of the market (debt and equity) make solid gains heading into early 2015. Rates in the US were falling as the ECB fought to unveil true quantitative easing (and because they may have rebounded from late 2013 highs anyway, following the taper tantrum). Stocks were in the midst of an unprecedented expansion, and economic data was improving fairly constantly. In the first half of 2015 , Chinese equities went parabolic, driven by a combination of a rapidly appreciating dollar and significantly cheaper oil. The Shanghai index more than doubling in value from mid-2014 levels. When the dollar stabilized at much higher levels, the crash was nearly as quick. That got investors thinking that things might get worse again before they got better…(read more)