Oh Boy … (TWTW June 13-17, 2022)

So last week I wrote “Not your friend” talking about the “trend”. It sure was confirmed (unless you are sort) this past week, as markets first took things in strides when the FED’s Jerome Powell hiked 75 bps (and the SNB 50 bps …), BUT then … Thursday, a rather tough day … hence … oh Boy!

Are markets finally beginning to get it? Central Banks no longer have our proverbial “backs” … and rather are piling on the rate hike. When the perenially cautious Swiss National Bank hikes 50 … you know that its not just Houston that has a problem, but also Zuerich; Geneva; et al.

Point is – this unravelling market looks like it may well continue to unravel for a while, notwithstanding the fact that last week’s action looks to have been a tad watershed like as far as the % declines experienced week over week, but particularly though on Thursdy/Friday.

Good luck out there … we’re all going to need it …

Latest weekly performance: (sectors; thematics; factors; geographies):

  • Painful pullback in Energy – speaks to recession risk? profit taking? both? does that suggest the next leg down in bear market?
  • everything hit pretty hard last week … = nearing capitulation?

  • higher beta category – aka themes hit HARD again this past week, despite markets being primed for 75 bps

  • Nowhere to hide = end games of sell-off? or beginning of next phase?

  • Canada – which up until recently was enjoying meaningful relative performance hit hard this past week, notably with significant Energy and Materials sell-off


YTD performance (sectors; thematics; factors; geographies)

  • Energy – still significant year-to-date performance, but notable pullback last week …

  • Thematics overall – in the throes of significant bear market? Where does this end? What will be the sign of “capitulation”?

  • in the positive until this past week, several factors now joining to the downside in terms of YTD performance. Sign we are at the tail end of sell-off? OR next leg of sell-off just arrived?

  • TSX now joining the “correction” … = risk of recession increasing in the minds of many?

Key takeaway: the leadership (Energy; Materials; Financials) took it hard on the shin this past week. A sign of a sell-off now reaching all corners of the markets before a bounce? OR a broadening of a bear market that won’t spare anything, with more damage to come … still …