The trading pattern that has dominated the markets for the past year could be breaking down—and that could spell opportunity for investors.
After a disappointing payrolls report on Friday morning, investors poured out of stocks and into the safety of bonds, a continuation of the "risk-on, risk-off" pattern that has come to characterize the post-financial-crisis markets. Depending on the economic news, the theory goes, investors either love stocks or hate them—even, seemingly, in the same week.
But while Friday appeared to be a classic "risk-off" day—the Dow dropped 62.29 points, or 0.5%—there are signs that the broader pattern of stocks moving in lockstep is beginning to wane, and that fundamentals are reasserting themselves.
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