The valuation story is being debated, but isn't really an alternative case for optimism at this point. We continue anticipating conservative guidance lower, and see this as what I've termed a 'double-dip' recession. Nothing's changed.

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Now, with mortgage rates crossing the 7% level today, and housing troubled (it depends, higher in some areas, lower in most), there are new variables like the mega-expensive rebuilding that will follow in Florida (again my view for at least a few years have been not to live on the Coast itself, although friend that do I certainly wish good recovery from 'Ian', perhaps with better protection).

Most Florida homes on the Coast have been 'cash' purchases, while average houses usually carry mortgages. In both cases Homeowner's Insurance goes through the roof (and the roofs were the problem) although a free-and-clear home doesn't require insurance if the homeowner wants to bear the risk. We'll find out more about that in the wake of the storm approaching right now.

And some of that may contribute to reconstruction and jobs, and oddly more people moving to the Sunshine State, which can't really sustain the growth in an adequate way. I have to explanation for 'why' zillionaires like Ken Griffin (Citadel) buy homes on middle-of-Biscayne-Bay islands (low elevation), and commit to new office or mixed-use downtown Miami structures (also very low elevation). 'Ian' should, but might not, be sufficient to sober such thinking.  

In-sum: 

Rate are moving up, recessions caused (or deepened) by the Fed in a sense are 'textbook responses', but the drought and war are not routine risks to the economy. The latter mitigates the prospect of the Fed setting us up for a quick subsequent drop in rates, though markets would respond accordingly. 

This market can and is overshooting minimum downside goals for S&P, with unknown outcomes to some of the geopolitical variables. However, if we're in the early stage of a 'new Russian Revolution' (as it seems in a sense), that's a wild card that could well favor the Bulls if there's no nukes and the people of Russia 'and' Ukraine prevail over a  few wackos that support Putin's insanity. 

In essence we have the pattern looked for, struggling efforts to rebound but for the most part still a lower low, especially for S&P.

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