Goldilocks Market Era Ends This Week, Says BMO; Nasdaq 100 +16%, Nikkei 225 +34%

NAS100-1.54%
JPN225-3.71%
According to BMO Chief FX Strategist Mark McCormick, the so-called "Goldilocks" market environment has ended this week, transitioning into a new policy order characterized by rising rates, persistent inflation, and tighter liquidity. McCormick noted in a client report that markets are now driven by policy shifts rather than single events, with favorable conditions for a stronger dollar and yen carry trades. McCormick stated: "The market is no longer in a Goldilocks environment, but entering a policy-driven, carry trade-dominated landscape that favors dollar strength." BMO recommends increasing equity exposure, pointing to the Nasdaq-100 index—up 16% year-to-date—and Japanese equities, with the Nikkei 225 gaining 34% since January, as evidence that stock market momentum persists.
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