There are clear signs that equity markets are struggling to make new highs. Earnings momentum globally has turned over, and several developed markets are down by more than 2% over the last month, most notably the Eurozone. In EM, both Brazil and Russia are off over 10% in the last month, observe analysts. Clearly the positive mood portrayed by still strong headline equity index numbers is somewhat misleading, writes SG’s Andrew Lapthorne. Economically, investors are becoming more downbeat, which is reflected in falling yield curves across most regions and an unwinding of the Value versus Quality Stocks outperformance from last year. This increasing caution is also reflected in equity market positioning, where the sensitivity of a typical cyclical trade (i.e. Value vs Quality again) to changes in the bond yield curve is on the rise. Bond momentum, not equity momentum, is the one to watch going forward. Today we include several pieces that as look at the US yield curve, and what that means for bond markets, and as a result equities.