In recent conversations with our accounts, we have been hearing more concern about the second round of quantitative tightening (QT2), which starts next month.
Today's batch of economic indicators has been unambiguously stagflationary. Consider the following:
Today's 4.0% plunge in the S&P 500 was more of the same pain experienced by most of the 11 sectors of the S&P 500 so far this year.
The Investors Intelligence Bull/Bear Ratio (BBR) dropped further below 1.00 during the May 17 week, to 0.65 from 0.68 the prior week.
How much pain at the pump can consumers take? The national retail price of a gallon of gasoline soared to $4.59 during the May 16 week.
It has been a good day for the US economy.
After many years of ultra-easy monetary policy, the realization that it’s going away has frightened investors to a degree unprecedented this early in a tightening cycle.
It’s good to be the King! You can spend lots of money by printing it. If you still have a fiscal deficit, the resulting inflation can help to narrow it by boosting tax receipts. Here in the US:
Friday the 13th was a lucky day for stock bulls. On Thursday, the S&P 500 was down 18.1% from its record high on January 3. It was on the edge of a bear market (defined as down 20%-plus from the most recent high).
It is a big week ahead, promising to provide lots of insights into the strength/weakness of the US economy. Two Fed regional business surveys—for NY and Philly—will be released for May.
Strategy I: 1987-Style Bear Market? I’ve recently been asked when was the last time we had a P/E-led bear market…
Are margin calls exacerbating the stock market selloff? Probably, but margin debt is relatively small compared to the market capitalization of the Wilshire 5000.
