Our global Macro Monitor system is flashing many Red Flags (and we emailed first warnings a few days ago to our clients). Our system (PETREL) spots about 60 Red Indicators today.
- almost all European and Emerging Markets Equity markets are turning down
- in the US equities are getting more nervous after 6-8 weeks of Risk -On.
- Specifically, VIX is in the early stages of turning up
- Many Yield Curves are flattening our further: the US, the UK, Japan, Mexico, France, Austria, etc.
- Japan looks – Yen is making 1.5 year high, Nikkei is down 2.5%. Japanese Small Capitalization Equities are in the world of hurt for several days already
- German Bund Yields drop further
- The Yield curves of Brazil, Turkey, Russia, Norway, Taiwan, South Korea became even more inverted
- Cyclically sensitive Equity Sectors: Transportation, Shipping, and Copper Miners are turning down
- many safety havens (US Treasuries, Mortgages) are strengthening
We think we are re-entering the Risk-Off period and we recommend caution.
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