Some stock markets are at all-time highs, but beneath the bonnet, there is also a vast bust going on owing to what strategists call “factor rotations”.
The key rotation for the past few months has been a gallop out of growth stocks and into value. This is driven by rising inflation expectations and yields which encourage investors to sell long-duration assets and buy shorter ones.
Pretty much the longest-duration asset available in the market is the tech growth stock with no earnings. It is leveraged to infinity. So it is being slaughtered.