Finance Unfiltered

Worst case scenario for stocks. Manufacturing falls into contraction territory, and prices paid INCREASED. Why do I care about manufacturing PMI? Because it has an extremely high positive correlation with the stock market. You can argue that it's not a massive part of our economy anymore, but the correlation is there... You can check it out yourself. Why do I care about prices paid by manufacturing companies, rather than consumer prices? Well, I care about both, but manufacturing prices have a very high correlation to inflation. I can explain why, but I also don't care why... the correlation is there. If the data keeps going like this (no guarantee of that), we enter a period of stagflation, the worst possible regime for stocks. This is not a reason for panic, but you need to be aware of it.

- Bobby-

NVDA reached double top target - Mike Arnold

Part of what's happening in the stock market right now is the reversal of the status quo, but not a change in the dominance of US markets, specifically the US stock market. At its core, this market will recover, and when it does, I believe it will be a multi-decade rally. I just don't think it's time for a recovery yet. More downside to come, so don't panic out of long-term holdings, but if you're still in short-term holdings, you shouldn't be.