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The Fed has re-iterated it is willing to sacrifice a good economy, a robust labor market, and growth in order to get ahead of inflation.
The problem is like several tightening cycles: Too late, too much, too fast, and as we enter a recession in clear denial: too long.
Fuente: Finviz
This technical index illustrates that the S&P 500 could be heading lower. The index has now traded below its critical 200-day average price for more than 100 sessions this year.
This negative indication has only occurred 2 other times in the past 35 years.
In the last two cases during the tech bubble and financial crisis, losses accelerated once crossed.
The S&P 500 is likely going to “test” its long-term 200-week moving average price.
It has “bounced” from there multiple time in 2011, 2016, and 2018, respectively.
Will this time be different like in 2000-2002, and 2008-2009?
Among the 20 main central banks, Brazil’s was among the first to begin raising rates in March 2021.
18 months and 1175 basis points later, most believe rates will go unchanged at 13.75%.
This tightening cycle was Brazil’s longest and sharpest since they adopted inflation targeting in 1999.
Gas prices surge in Europe as Russia stepped up war efforts this week.
Russia announced a “partial mobilization” of troops in Ukraine and pledged to annex occupied territories.
A prolonged conflict seems more than likely, and the likelihood of a major European recession is much higher.
The“sweetspot”in fixed income continues to be below 3 years duration.
We remain in short- dated bonds until this curve shows signs of flattening.
Following in the footsteps of Fedex last week, Ford warned in afterhours trading the supply costs will jump an additional $1billion.
They warned also of parts shortages, and supply issues will negatively affect the company’s earnings growth going forward.
This flow of pre-announcements by major companies is an ominous sign of a bad earnings season in October.