4. Correlation or Causation.
Stockmarket generally has a bad time when banks are tightening up on lending.@topdowncharts $MACRO $SPX $SPY pic.twitter.com/QlcmmDio2E
— Callum Thomas (@Callum_Thomas) May 14, 2022
5. Correlation vs Causation pt 2: Shifts in bank lending standards point to upside risk for credit spreads…t.co/wo0tFSQNSB $MACRO $JNK $HYG pic.twitter.com/dK5h4JsRC9
— Callum Thomas (@Callum_Thomas) May 14, 2022
6. And another perspective: financial conditions are rapidly tightening = bad 4 stonks ššš
n.b. this FCI does include equities as one of its components, but it is clear that broader financial conditions have tightened a lot.
h/t @MichaelMOTTCM $MACRO $SPX $SPY pic.twitter.com/cYbXBcxPLu
— Callum Thomas (@Callum_Thomas) May 14, 2022
People are still trading this bear market as a bull and will get completely ironed out. US government bond yields are going higher and it will kill all risky assets. Crypto, equities, credit, real estate, currencies and eventually commodities will all tank together.
— Wifey (@WifeyAlpha) May 15, 2022
$spx historical drawdowns pic.twitter.com/UfBTqeMolG
— Ćlvaro Oviedo šŗš¦ (@alvoviedo) May 15, 2022
A year ago, the #Fed was confident about #inflation, asserting that it would be back around 2% by the end of 2021.
Today, inflation is 3-4 times that level and likely to remain high into 2023.
Today's Fed, it is confident about a "softish landing."
Let's hope so. A lot at stake.— Mohamed A. El-Erian (@elerianm) May 15, 2022
šš° Retail traders no longer ābuyer of first resortā as US stocks slide
š¹ Net retail inflows amounted to just $2.4bn this month to May 10, compared to $11bn in April and $17bn in March.
(via JPM, FT) pic.twitter.com/LgyMLm7GiD
— Michael Goodwell (@MichaelGoodwell) May 15, 2022
$spx leveraged ETF pic.twitter.com/Q78VRkZeZZ
— Ćlvaro Oviedo šŗš¦ (@alvoviedo) May 15, 2022
Fed Chair Powell: Controlling inflation will ‘include some pain’ – Marketplace
After steering the U.S. central bank through anĀ unprecedented series of challengesĀ from the pandemic, Federal Reserve Chair Jerome Powell and the Federal Open Market Committee face another critical test: controlling theĀ highest inflation in decadesĀ without tipping the economy into a recession.
Last week, the FedĀ announced the biggest interest hikeĀ in 22 years and plans for reducing the Fedās nearly $9 trillion balance sheet.
āWhat we can control is demand, we canāt really affect supply with our policies,ā Powell told Marketplace host Kai Ryssdal in an interview Thursday. āAnd supply is a big part of the story here. But more than that, there are huge events, geopolitical events going on around the world, that are going to play a very important role in the economy in the next year or so. So the question whether we can execute a soft landing or not, it may actually depend on factors that we donāt control.ā