Bulls Stare Into Dark Abyss As Event Risks Loom

Bulls Stare Into Dark Abyss As Event Risks Loom

It wasn't a good week to be a bull. Images of FedEx's largest one-day plunge in 42 years were seared into corneas Friday, as equities limped out of what, in the end, was among the worst weeks of 2022 for US shares (simple figure below). It was policy panic, yes. But, thanks to FedEx's ominous macro warning, it was a growth scare too by the time the weekend rolled around. Suffice to say stocks' efforts to overcome a perilous seasonal were stymied. Another disconcerting CPI report short-circu
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4 thoughts on “Bulls Stare Into Dark Abyss As Event Risks Loom

  1. Newsflow and comnentary clearly very negative here at Heisenberg and elsewhere . How were the infows to the markets I wonder. A lot of stocks still not as down as we had last seen these levels, some even showed signs of enthusiasm today and yesterday.

  2. M-Man, this market has seemed to be impervious to reality so maybe it will finally wake up. Tossing aside the geopolitical, how can this market thrive with elevated rates and very sticky inflation?

    1. I would argue we haven’t seen an event, like major unemployment among white collar workers, that forces long term holders to sell.

      Consensus is to be short, so any dives are met with purchases and subsequent short covering.

      With bond yields this high, we’re starting to cross the point where it makes more sense to hold bonds long term than equities, so we may not be far from a tipping point. Once the job losses start in earnest in about a year we’ll see panic and forced selling dominate until the Fed pivots.

      I’m positioned up for a protracted (3-4 years) market downturn.

  3. Recalling the one time in my life where a restaurant served up an amuse-bouche where they actually called it that.

    It was a bonsai tree (plastic) with wafers of caramelized suger in the branches to accentuate the foliage. The “leaves” had crickets and grasshoppers encrusted therein. I ate it unhesitatingly, because when else will you ever have the chance to eat insects off a bonsai tree? My wife was less enthusiastic.

    It was crunchy and salty, but otherwise pretty flavorless.

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