Modern finance theory can't explain why nominally intelligent people keep making the same mistakes over and over again, each time expecting a different result. It all comes down to three things: greed, greed, and more fucking greed...
Recession safe havens (Utilities/Bond proxies)
A cogent mind would ask how do we break this monetary-fueled gambling addiction and otherwise restore sanity to real investment? It all comes down to breaking perverse incentives. As always, greed and instant gratification are at the heart of the problem. Which explains why Wall Street analysts are almost always uniformly bullish on stock market prices. There is no upside from downside, hence better to be blindly optimistic.
The current instant gratification model asymmetrically rewards short-term performance over long-term results and protection of capital. This asymmetry is embedded in the annual Wall Street bonus model. It's at the heart of what drove otherwise moderately intelligent people to buy up insolvent subprime CDOs in the weeks before they imploded. After that they returned to bagging groceries where they belonged in the first place.
September 27th, 2019:
In the Information Technology sector, 29 companies have issued negative EPS guidance for the third quarter, which is nearly 45% above the 5-year average for the sector of 20.1. If 29 is the final number for the quarter, it will mark the highest number of companies issuing negative EPS guidance in this sector since FactSet began tracking this data in 2006."
The Information Technology sector is expected to report the second highest (year-over-year) earnings decline of all eleven sectors at -10.1%. At the industry level, four of the six industries in this sector are projected to report a decline in earnings: Semiconductors & Semiconductor Equipment (-30%), Technology Hardware, Storage, & Peripherals (-14%), Electronic Equipment, Instruments & Components (-9%)"
China's markets are closed for the remainder of this week and through October 9th for "Golden Week", so who will put a fake bid under their markets is anyone's guess.
Needless to say, it won't be Trump:
Speaking of central bank muppets, gold is getting shellacked during Golden Week. Just the latest momentum traders taken to the woodshed:
"Gold speculators sharply raised their bets this week for a 2nd straight week and by the most in the past seven weeks. The boost in bullish bets brings the current standing to the highest level since July 5th of 2016"
Which leaves only one bubble still standing...