Anonymous ID: 517f92 Aug. 6, 2022, 2:34 p.m. No.17094680   🗄️.is 🔗kun

Carnage!

 

Well that escalated quickly. Apart from crude oil, almost all asset classes were clubbed like baby seals today as event risk anxiety (ahead of FOMC) combined with OpEx technicals ($3.4 trillion options expiration) and European 'fragmentation' fears and all the usual geo-political, geo-economic factors that are holding back the dip-buyers as the S&P drops into a bear market and US equities broadly test 2022 lows (while TSY yields push multi-year highs).

 

The S&P closed down 22% from its highs and at its lowest since Jan 2021…

 

As Bill Blain noted earlier, the summer somnambulance should be upon us – investment desks and traders sitting back to watch their carefully composed portfolios and positions cruise through the summer before the markets get hot again in September. At least, that’s how I remember the long-balmy days of my market childhood back when I was a young banker….

 

Not this year. Too many fundamental tremblors threaten to rock the markets:

 

Inflation, Inflation, Inflation

 

Supply Chains, Covid and China

 

Europe and the ECB

 

Recession/stagflation

 

War vs Jaw

 

Central Banks tightening

 

Stock Resets and Earnings

 

Bond Market Meltdown

 

Global Trade Reset and De-Globalisation

 

The US, The Dollar and Trump

 

I predict a stormy Q3 – the usually calm languid dog-day markets of July and August being replaced by lumpy seas of bad numbers, grey storm skies as markets struggle with the acceleration of negative news-flow on inflation, corporate earnings, markets and increasingly wobbly politics, and few sharp pointy rocks of financial destruction.

 

Financial Conditions are tightening once again, ratcheting down as The Fed stomps on the brake, surveys the damage, lifts off briefly, then re-stomps on the brake…

 

https://www.zerohedge.com/markets/carnage