Equity markets certainly don’t price in the upcoming recession yet:

typically, in a recession earnings drop 20%+, while S&P500 Index still prices in $230 of earnings. This time around despite the inflation (and, hopeful thinking), earnings might drop even more:  1) US corporate margins are SO high Рmulti decade highs 2) undoing the unusually favorable Macro conditions of the last 20-30 years, we would ...

Nothing is new under the sun!

Tesla just made EVs popular due to climate change and the coolness factor.But almost 125 years ago EVs were successful in the States!Even EV taxis in NYC.And back then that fate of the automotive industry wasn’t clear – either electric or internal combustion engine. In New York, a company was providing electric taxis as early ...

Defensive sectors don’t really work in RiskOff…

Despite the (mis)perception, seemingly Defensive sectors (Staples & Utilities) don’t really work in RiskOff regime. Check this chart of the US Staples stocks with the periods of RiskOn or RiskOff (as defined by TenViz). Being thick in cash is a better strategy… ...

It bothers me how primitive are BOTH the forecasting function and the reaction function at big companies like Microsoft.

Let’s look at headlines from Microsoft last few weeks:1) Microsoft cuts earnings on the weakness in the PC segment2) Microsoft Curbs Spending on Travel, Gatherings in Bid to Reduce Costs From here we can conclude:1)The nature of their misses says that they have NO ability to forecast the future beyond a simple extrapolation of short-term ...

Dutch Gas TTF – most important natural gas proxy for Europe, just broke out to the all time highs, overtaking the spike from March.

It would certainly pull higher prices of other locally traded natural gases globally,– including in Asia and, inevitably, in the US.And, eventually, given the substitution of crude oil and gas this would lead to new highs of higher Energy prices globally. Again, that would feed into the inflation globally through all commodities and global shortages. ...

Make no mistake – this “benign” 8.5% inflation report does NOT nullify the inevitable recession.

Inverted Yield Curves (the US, Canada, the UK, Germany, Mexico) would argue strongly for the inevitable recession. Have a look at how profoundly inverted US Yield Curve is! ...