Beware: Animal Spirits Are Running Loose Again
==========

Animal spirits are running loose in the market, with Bitcoin reaching all-time highs and NFTs selling for high prices. Investors are not focusing on macro factors such as balance sheets or earnings growth. In 1999 and 2007, animal spirits were also running loose, and it did not end well. The article discusses upcoming macro events, including US macro data and the Fed's reaction function. The US job market report showed positive outcomes, but there are concerns about the U6 underemployment rate. The article also mentions potential risks such as the Fed's shift to a 1995-style cutting cycle, the ECB's reluctance to cut rates, and the potential impact of a Bank of Japan hawkish tilt. The European economy is flat, and there are concerns about ECB policy mistakes. Japanese authorities may try to exit from negative interest rates, which could lead to capital repatriation and impact global bond and FX markets. The article concludes that while animal spirits are hard to kill, there are several macro volatility events on the horizon.



https://www.investing.com/analysis/beware-animal-spirits-are-running-loose-again-200646691