Market Correlations Like 2016 Suggest Dominoes Are Lining Up to Fall
- Morgan Stanley cross-asset gauge shows systemic risk building
- Development could spell an end to profitable hedge fund trade
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While on-again, off-again risk aversion is the mantra for global markets in this age of trade spats, here’s a sign that the latest flight to safety may endure beyond Donald Trump’s next tweet.
A Morgan Stanley index that tracks correlation among regions and asset classes has reached its highest level since December 2016, a possible signal that the market’s defensive positioning could prove more lasting, according to a note from Tim Emmott, executive director at Olivetree Financial Ltd.