Markets are approaching a fork in the road, Bank of America Merrill Lynch’s Rates Strategist Ralf Preusser notes. With the S&P 500 higher by a statistically notable 121 points in 2017 with less than two months under the belt, Preusser says “we are approaching a ‘show me the money’ moment in markets” as a correlation breakdown will eventually resolve itself. Only one market will be proven correct.

Correlation breakdown: Stocks and bonds on divergent paths

The moment of truth markets is approaching. There is the hope for US “fiscal progress” to be delivered. This mostly priced-in consensus stock market attitude will likely result in a move higher in US interest rates and highly correlated US dollar.

But the future of the hot as fire stock market might meet an unpleasant reality. With global economic data showing strength and asset flows impacting supply and demand and pushing stocks higher, Preusser notes an emotion that tends to dampen wild enthusiasm: “disappointment.”

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