Yesterday in New York, should have been the usual bounce back day for stocks?

Instead, while there was some attempt, the market settled back toward the previous day’s lows.

This is a somewhat precarious situation and encourages our view that the 'day and technical traders' were caught enthusiastically long. While the real money funds were very happy to take advantage of the liquidity provided and continue to sell down their portfolios.

It is a bear market. Has been all year. US data was worrying in that Existing Home Sales fell another 2.4%, and New Jobless Claims leapt to 218,000. This remains a low and good number, but it did exhibit a bit of a break to the upside which could again indicate the tide is most definitely turning down for the US economy.

The ECB wants to move toward tightening, or so the ’talk’ goes, but it is just way too late for the ECB who was focussed on being popular, and is just now starting to chase the inflation wave that has already inundated the region. This will provide a moment of support for the Euro, but a bit of a 'snowflake in summer’ rally, really. ECB rates will fall further behind US levels, even if the ECB starts to raise.

Additionally, there is that small thing of war on the doorstep and energy supply concerns recession likelihood.

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This article was written by Clifford Bennett, Chief Economist at ACY Securities.