In this week’s market review, we see the negative moves now compounding as the bears remain in charge, emboldened by fresh statements for Central Banks about the need to tackle rampant inflation, and even confirming that falling markets ARE PART OF THE PLAN.
As usual we start with the US markets, as it really sets the tone for global trends, cover Europe, Asia and Australia as well as crypto and commodities.
In fact on Friday US stocks pulled back from session lows after the S&P 500 dipped 20 per cent below its January 3 closing record. 20% of course is defined as bear territory. Treasuries and the dollar gained as havens caught bids. The NASDAQ is however already over that line by some margin, and we can expect more falls ahead.
Afterall, the US consumer is deeply negative. “While many cross-currents are causing the current sell-off, the proximate cause of the recent acceleration in the stock declines revolves around fears about the U.S. consumer,” Glenview Trust CIO Bill Stone wrote. “For the first time in the post-Covid period, retailers have been stuck with some excess inventories. Costs due to inflation are also taking their toll on their earnings.” “Lastly, there is evidence that the lower-end consumer is feeling the pinch from the increase in prices,” Stone said.
The sell-off has led to increasing warnings of stagflation and to Wall Street strategists cutting their S&P 500 targets. It has also led to investors scrambling to find places to hide during the downturn.
And At the end of another volatile week, price swings were likely to be exacerbated by the monthly expiration of options tied to equities and exchange-traded funds.
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