Market comments #1

Hello everyone. I tried to put out regular market updates in the past, but I failed to do so for different reasons. This time, my idea is to gather the best tweets, articles, charts, etc., and add some brief comments. I will post these out regularly as long as I have decent material.

1. Sentiment is still very bearish, which means more upside is still possible. twitter.com/charliebilello/status/1555281823344762881

2. Soft landing team seems to be doing well so far... Until it eventually won't be doing so. I believe a scenario like 1989 is possible for markets, though I am slightly less optimistic than Jared. bloomberg.com/opinion/articles/2022-08-04/a-soft-landing-in-the-economy-is-starting-to-look-more-likely twitter.com/FedGuy12/status/1555534384584953857

3. Valuations can get out of hand as multiple market forces drive stocks. Stocks could trade higher and higher despite bad earnings. twitter.com/JeremyDSchwartz/status/1555195687314259969
twitter.com/JeremyDSchwartz/status/1555195688358658058

4. The US has low unemployment, but its labor market is nowhere near as strong as it was before Covid or before the 2008 GFC twitter.com/charliebilello/status/1555539757408591873 twitter.com/charliebilello/status/1555534923422994432

5. Jobs are a lagging indicator; however, as the Fed is working with lagging data, they could hike more than they should. Good news now = bad news later; therefore, the market suffers now on good news, as it 'sees' the future. twitter.com/Jkylebass/status/1555534977781174275 twitter.com/lisaabramowicz1/status/1555531996985806848 twitter.com/profplum99/status/1555520254939320321

6. The yield curve inverting doesn't mean we will have a crash. A recession is guaranteed at this point, but remember that the recession comes many months after the inversion. twitter.com/lisaabramowicz1/status/1555532966008442881

7. So far, this is a worse situation than 2012, 2015, and 2018; however it is nowhere near as bad as 2008 or 2020. Could it get that bad? I doubt it for now. Of course, with new data, I am ready to change my mind if I have to. twitter.com/jnordvig/status/1555518172429955077

8. Some interesting comments by Jared Dillian with whom I agree: twitter.com/dailydirtnap/status/1555214197549666305 twitter.com/dailydirtnap/status/1555536716219441152

9. My main worry is what happens between the US and China in the next few months, especially in October, as I think it would be tough to avoid an invasion. Heightened tensions alone can create a lot of problems... twitter.com/disclosetv/status/1555500308092096512

10. The Turkish Lira is heading yet for another collapse. No idea what could stop the Turkish economy from falling off a cliff in the next few years. zerohedge.com/markets/desperate-need-fx-turkish-central-bank-sends-gold-london