The market has hit a rough patch the last couple of days, falling almost 1% yesterday. Investors have once again grown anxious about slowing growth and trade tensions between the US and Mexico. Despite this renewed anxiety, Bank of America Merrill Lynch is encouraging investors to buy the dip. The bank has frustration about the “stubbornly flat” yield curve, but says that “The correct strategy in 2018 was ‘sell-the-rip’; Positioning, Policy, Profits and Populism argue the correct early 2019 trading strategy is to ‘buy-the-dip”.
FINSUM: The market has bounced back a long way from Xmas eve. In some ways it feels too much too fast, but then again, valuations are more sensible and the Fed has backed off.