Markets addicted to central banks' backstop, Citi warns
- S&P, Nasdaq hit highs on gains in health, tech stocks
- Coca Cola (KO) Announces James Quincey to Succeed Muhtar Kent as CEO; Kent to Continue as Chairman
- Broadcom Ltd. (AVGO) Tops Q4 EPS by 11c
- Sibanye Gold (SBGL) to Acquire Stillwater Mining Company (SWC) in $2.2B Deal
- Exclusive: ECB rejects Monte Paschi's request for more time to raise cash - source
A picture illustration of crumpled kuna, Dollar and euro banknotes, taken in Zagreb January 18, 2011. REUTERS/Nikola Solic
Get access to the best calls on Wall Street with StreetInsider.com's Ratings Insider Elite. Get your Free Trial here.
LONDON (Reuters) - Central bank efforts to soften the blow to markets from weakening fundamentals are losing their impact and are leaving a system vulnerable to shocks, analysts at Citi said.
The post-Brexit rebound across risky assets is largely due to central bank intervention, Citi says.
"Beneath a veneer of a stability, the system is becoming ever more highly sprung," said Citi's Matt King in a note to clients.
The U.S. bank warns that of the adverse side effects of such interventions, such as the disconnect from fundamentals and investors' inability to benefit from diversified portfolios as cross-asset correlations spike higher.
The benefits to asset prices are also starting to fade.
While UK equities have benefited from a weaker sterling, European and Japanese stocks are stuck despite the expansion of balance sheets by the respective central banks.
(Reporting by Adela Suliman, Editing by Vikram Subhedar)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- All eyes focused on clues for future Fed hikes
- Finisar (FNSR) PT Raised to $44 at Needham & Company, Estimates Raised Sharply
- Jefferies Raises Price Target on Broadcom Ltd. (AVGO) to $210 Following 4Q
Create E-mail Alert Related CategoriesAnalyst Comments, Fed, Forex, Reuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!