From the AFR:
“But [low rates] has created an incentive for companies to look and act like bonds,” he said.
“They [equities] are not as cheap as they were but they’re not as expensive as they’ll get,” he said.
…The investment landscape, he says, will be characterised by the “4-Ds” – a ‘divergence’ between the US and the rest of the world – will force the ‘dollar’ higher. That in turn will push down the price of commodities, giving rise to ‘deflation’ that will hold interest rates down, forcing ‘duration’ assets higher, compelling investors to chase yield – most likely through equities.
Some forecasters are expecting the US Federal Reserve to raise interest rates within a few months [but] Mr Harnett is backing the market’s pricing to be right…
I agree with it all, the only risk to it being an overly slow RBA. Welcome to the post-GFC blowoff!
