The Stock Market’s Amazing Complacency

It continues to astound us: Italy had such an ugly day today, with UniCredit plunging again, and yields widening, and yet…. nobody cares.

Stocks in the US are up yet again, and nobody here is really even talking about all the same worries that were non-stop in the headlines last year.

We’re not sure what’s up.

Here’s a look at the S&P (green line) vs. Italian 10-year yields (orange line). The two have never been that correlated, though to some extent in the past, when yields have spiked, the S&P has fallen. Now both are rising together.