Weekend Sept 24 2022
check out Deflation.com. As noted all asset classes declined this week.
https://deflation.com/
Our weekly column posted yesterday noted that the prices of near all investments declined this week. Let's take a look.
Stocks
Industrials took out the 200 week moving average and that is significant. the fall this year has erased all the gains from late 2020.
Transports
Transports have done the same. And that constitutes another Dow Theory sell signal as the Transports and Industrials have both fallen to new lows.
In booth cases the 50 week MA is about to or has crossed teh 87 week MA, another sell signal.
Fed Ex
The FEd Ex CEO is on record predicting a world wide recession. If his company stock price is an indicator he is correct.
NYSE Advance Decline Line
the NYSE A/D line is the most reliable indicator. It topped along with the major indexes in late 2021. It set a new low this week falling beneath ALL its MAs.
Proxy Stocks
AMZN
the June low took out 45% of the December value.Now a another wave down has begun which will take prices much lower, look at how high MACD is. and just now turning down.
FB
Changing the name form FB to META did not stem the decline, now off 64%.
Bonds
Ten Year Note Yield
This has more than doubled from 1.6 to 3.8% just this year. Mortgage rates are now over 6%. So no surprised luxury home sales are off 28 %. As noted in the WSJ already buyers have stopped paying over the ask price without an inspection.
2 Year Yield
Two year is yielding 4.2% while the ten year is at 3.69%, an inverted yield curve. This inversion has I believe preceedded all recessions going back to WW II.
BLE closed end Municipal Bond Fund
Last Wednesday I wondered if this could return to its covid panic low, and it looks like it just might do that.
BLE closed at a new low Friday. that
That move takes out the May low so no real support till 8.5. Notice PMO had a bump up and is now turning down.
This will be quite remarkable. It has already lost one third of its value. At 8.5 it will be worth 56% of its last November high. I wonder how many retirees have all their money in such funds? Or in REITs?
Real Estate
That is a 27% hit from the November high. Note that stocks indexes and just about everything else peaked Nov-Jan 2022.
Gold
William DeVane is currently starring in cable tv ads for gold and silver. the story is that gold is a defense against inflation deflation or any other flation politicians can dream up. But that is not the case.
Shares of gold mining companies are not doing any better.
ASA has dropped 43% just since May.
Crude Oil
A 450 drop since March. While this has lowered gasoline prices. like FED EX it is warning of a global slow down with less demand for petroleum products.
Gasoline
Lower gasoline prices won't stave off the unhappiness with a bearish stock market and what it is doing to 401Ks in the mid term elections.
Currencies
British Pound