Going Nowhere in a Hurry

In this buzz: equities showed first sign if life; stocks are still weak; U.S. rate saga; U.K. new Prime Minister and more…

Start of the week:
Equities re-opened after the long weekend and showed the first sign of life since Fed Chairman Powell channeled his inner Mr. T and warned of more “pain” ahead; setting expectations for another sizable rate hike at the September FOMC meeting.

The doom and gloom:
Stocks are showing signs of weakness as rallies fade and major indices have closed lower last week for the third week in a row.

One can’t scroll through their phone without seeing harbingers of doom warning of the next “20, 30, or 40% leg down”, or stories about this being the “most expensive market bottom in history.” But for all the doom and gloom, in addition to legitimate concerns about the headwinds facing risk assets:
– high rates, QT, inflation, war; equities haven’t really collapsed (yet).

In a holding pattern :
So as the market vacillates; stuck in a range. Granted, rallies are sold more aggressively, and dips are bought cautiously and without conviction, but for the time being, we seem to be in a holding pattern.

Meanwhile around the world :
It’s not as if there isn’t fodder to traders to feast upon. In addition to the U.S. rates saga, the U.K. has a new Prime Minister, and its own inflation problems, Europe could be facing a terrible energy crisis this winter as Russia cuts off gas supplies “indefinitely” while conflict rages on in Ukraine. Stay tuned.