Divergent fortunes

Stock and bond markets seem to be going their different ways. During the first sub-prime scare in March, both dropped together. This time they haven’t. Last week stock market indices in the US, Europe and Asia neared or passed record highs. But government bonds have fallen. If there’s growing fear in financial markets, it hasn’t affected equities - yet. One reason is that stocks respond to fundamental trends, such as profit growth. For the moment, this is still going strong. Another reason is t...