Asian stocks held in line with broader equity markets last night, helping the historically difficult month of September print strong returns in light of the Fed’s decision not to taper. Gold, while positively affected by the information, has struggled to hold any significant gains from the news. A potentially bearish sign long-term.
Other barometers of cheap money haven’t really been extending their level of outperformance; risk assets like equities and commodities have held onto the year’s gains, but are now plagued by valuations that could make them unattractive in a new era of tapering, whenever that actually happens. Investors are paying more now from expected earnings than they have in any of the recent past, and whether or not that is justified will be fleshed out by no better event than an ending to cheap money.