As global growth expectations collapse, so do bond yields (now at new record lows for developed markets) but that doesn’t stop equity ‘investors’ from piling into already richly-valued stocks on the hope that next year will be the year when global macro and micro hockey-stick projections will work out…
With a P/E of 21, global stocks have rarely (outside of the financial crisis) been as expensive… Which may explain why some investors are piling into bonds, no matter how low the yield.
Note that the relationship between valuations and rates decoupled in 2012… when Ben Bernanke unleashed QE2 and broke the capital markets.
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