BLOOMBERG ETF ANALYST: THE RECENT SURGE IN OIL PRICES HAS RAISED INFLATIONARY CONCERNS, AND THE COMBINATION OF STOCK AND DEBT HAS RE-EMERGED

According to Eric Balchunas, a Bloomberg ETF analyst, “the bond asset failed again to fall against the hedge market. The United States Consolidated Bond ETF (AGG), long-term United States debt ETF (TLT), and investment-grade corporate debt ETF (LQD) have all fallen since the Standard 500 ETF (SPY) fell from a high point in June. Although this is only a short-term performance, it has created a perception of the double-killing of the stock debt in 2022. I know that this is a topic that touches a lot of senior investors -- no offense, but the data don't lie: for a long time, the market has relied on 40% of the classic 60/40 bond silos to hedge 60% of stock silos. This is, in my view, the central reason why the current currency market common fund, the buffer ETF, continues to attract large inflows. I do not assert that bonds will never be able to hedge against market risk, but that their recent hedges are indeed poor. The logic behind this is that the Fed has long maintained a low-interest-rate phase, with two types of equity debt synchronizing for long periods of time; as a result, in 2022, when the Fed sharply increased interest rates, the two fell simultaneously. The recent surge in oil prices has revived inflationary concerns, and the combination of stock and debt falls has resurfaced.”