E Market Briefing For Thursday, Aug. 29

Excessive pessimism leads to optimism - reflecting confused uncertainty, in a market which is just maintaining a rangebound S&P pattern. The recession fears are a bit ridiculous; and the assessments constantly so worried about 'when' (how about 'if') it occurs; miss that it's been with us. Of course that's not to say the inversion curve isn't important; but it also reflects the global picture; which has us move lower but remain relatively firmer; and it is not even entirely reflective of US economic prospects (likely opposite in fact if we get a China deal and things sort-out more modestly over time). Of course there's a negative alternative; but while that is more cataclysmic; that is not what this market is necessarily facing as the rolling chaos persists.  

  

As long as it seems possible, without any 'real' indication of which argument is truly valid regarding extended S&P technical levels versus 'credit bubbles' that of course pose an historic risk -if it busts. But in a money-shifting sort of way, that has many believing this would be an enormous boon to equities.  

I suspect both perspectives are valid; however one better add to the mix the awful performance of Industrial Material and heavy industrial stocks; that tell one that 'trade' (or lack of a deal) combined with sluggish global demand, in fact matters a lot when one adds 'technical analysis', liquidity and/or credit market moves, along with valuation fundamentals, to what is a witch's brew.

  

Remember that history is against 'fighting the Fed' (which Trump was prone to do again with today's tweets comparing rates in Europe versus the USA), and history is against ignoring the recession prospects based on low rates (ie: the inverted yield curve is becoming such an exceptionally extreme risk, that when the bubble does burst the ramifications could be dramatic). 

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