MarketWatch/Isabel Wang/6-23-2022
“‘We have been and remain in a ‘de-risking, defensive and de-rating’ mindset for 2022, as Fed hikes in the current downturn should create collateral damage, leading us to adopt a bearish stance on U.S. Consumer, Financials and Small-caps,’ said Manish Kabra, Societe Generale’s head of U.S. equities, in a Tuesday note. ‘But the committed fight against inflation looks set to trigger a domino effect, with the Housing and Credit markets looking like the next dominos to drop.’”
USAGOLD note: One cannot help but recall that the Fed’s tightening into a slowdown in the late 1920s led to the 1930s Great Depression. We will cautiously add that a Depression is not inevitable under these circumstances. At the same time, the financial earthquake warning from Societe General registers more ominously on the Richter scale than others we have encountered.
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Bloomberg/Denitsa Tsekova/6-23-2022
“In the view of JPMorgan Chase & Co. strategists, the reason why this may be the end of the bear market is that investors are holding way too much cash. Nikolaos Panigirtzoglou estimates that cash levels are close to 40%, the highest level in a decade.”
USAGOLD note 1: With all markets either in limbo or major decline, you might have been wondering where all the money garnered from the sale of various assets is ending up. Now you know. JPM’s Nikolaos Panigirtzoglou thinks we may have reached the bottom for both equities and bonds. We will see on that one. Given the magnitude of the bubble’s inflation, its deflation might come as a surprise to stock and bond market bulls.
USAGOLD note 2: Cash is trash, but many investors might be thinking it is better than the alternative. Of course, there are a handful of assets that haven’t been part of the everything bubble – most notably gold and silver. And perhaps that is why they are holding their own while all else is deflating under the onus of rising interest rates.
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