The financial markets – what’s occurring 19 April 2022 The weekly reviiew

I remain bearish stocks!! Rallies are failing.

Inflation continues higher. Costs rising. Supply chains not improving (Shanghai lockdowns).

FED are tightening financial conditions. Economic slowdown threatens (retails sales less inflation are weak)

 

 

 

 

 

 

 

 

Transports are a recessionary indicator.

Bond yields continue to rise particularly in the shorter end but the longer end not rising as much signifies curve flattening – signalling a recession down the line.

Consumer sentiment in Blue, grey lines = recessions!!!

 

 

 

 

 

 

 

 

 

 

DJIA Streak of 16 Consecutive Positive Aprils in Jeopardy – As of today’s close, DJIA is down 0.77% in April. S&P 500 is now down 3.06%. NASDAQ has had the most challenging April so far, off 6.25%. Russell 2000 is down as well.

 

Fed watch

Fed board members’ have in unison spoken about rate hikes and the end of QE and the start of reducing its balance sheet. The meeting in early May will confirm this. They do not give “bum steers”.

Yesterday Bullard said he was not averse to a .75% increase!!! He is a hawk, however.

Bulls are hoping the FED will save stock markets and reverse their tightening strategies (they have barely started and their (One of two Jobs) is to control inflation.

 

China

Makes most of the world’s goods!!! Production cuts because of Covid lockdowns are inflationary and recessionary.

 

 

 

 

 

 

 

 

 

 

Bonds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Will be discussed at length in the new course https://iift.ie/bond-market-trading-investing/

Nice to see some old friends have enrolled already.

Geopolitics

As mentioned, many times, the further in time we move from a major incident the less effect it has on markets. Ukraine is not affecting stock markets.

Stock markets

Tech stocks look so poor on these charts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Defensive stocks in Vogue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Are we back living normal lives again?

 

 

 

 

 

 

 

 

 

My chart guy says

Bulls in #ES_F had a perfect setup last week to rally at 4385: Its the 50% fib retrace, 50dma zone, *and bull flag in play. Tried 4x & failed Plan next week: Unless bulls can pop above 4410 1st, sell to 4340 is next, bounce shot there with 4445, 4500 target

https://www.investing.com/earnings-calendar/

EARNINGS SEASON watch for THREATS from earnings!!!

Conclusion

Seasonally still positive, but interest rates and bond yields cast a shadow.

Earnings will have to be amazing to maintain these high prices, any weakness will lead to sell off/profit taking.Colin  01-6644034 0851722729

Risk management is vital.