A Tug-of-War Between Bulls and Bears Is Muddling Risk Indicators
- Rally for U.S. stocks stands out against some haven strength
- New clash between China and the U.S. complicates outlook
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It used to be understood that if haven assets rise, then the risky ones would fall. Now, with both rallying, investors are having to rethink their playbooks.
The explosive recovery for U.S. stocks stands out against a commensurate rally for gold, which acts as an inflation hedge as well as a safe play. Equities in both the euro area and Britain entered bull markets in recent weeks, even as demand for top-rated government debt pushed German yields further below zero and took the U.K.’s negative for the first time.