Fundamentally speaking we have seen no improvement at all for $SPX. This move was purely technical.
The Fed is out of ammunition, stimulus plan is fully priced in, optimism on recent COVID-19 growth slowing in NYC is overpriced, and the economic impact of this is just starting.
— The Kobeissi Letter (@KobeissiLetter) April 7, 2020
Why the monster QEs are deflationary:
– Incentivises debt that is used for current spending from governments that raise taxes on productive sectors at the same time.
– Money velocity collapses
– Overcapacity soars
– Massive inflation in non-replicable goods and sov bonds pic.twitter.com/M865KFdJ4l
— Daniel Lacalle (@dlacalle_IA) April 7, 2020
NFIB Small Business Confidence is a great leading indicator of S&P 500 EPS. It also looks exactly like the ISM MFG New Orders Index when you look at a YoY change. #SmallBusiness #ISM #EPS $SPY pic.twitter.com/i8Udu9UBbe
— Michael Kantrowitz, CFA (@MichaelKantro) April 7, 2020