The continued rally in equity markets seems to be slowly reaching its crescendo. While the fundamentals have been screaming bearishly for some time now, there have been a number of structural factors at play driving markets higher in spite of these headwinds.

Following OPEC’s surprise production cut in April that saw crude oil squeeze from $65 to $80 per barrel in a manner of days, hedge funds and the like have once again resumed selling on slowing growth and recession fears.

The current economic and investing environment remains one of the most challenging and difficult to navigate in recent times. We have stubborn inflation, economic resilience, geopolitical tensions, tight labour markets, rising interest rates, higher for longer monetary policy, QT, bank failures, overwhelming bearishness and now, issues surrounding the debt ceiling.

Our entire financial system revolves around credit. This includes the ability to access credit for new loans, and more importantly, the refinancing of existing loans.

Inflation regimes often coincide with changing political regimes and agendas, much of which stems from the rise of populism and fiscal dominance. As a result of decades of globalisation and rising wealth inequality, we may well be entering a new regime - one of higher inflation and higher inflation volatility.

Up until recently, crude oil inventories saw continued build after build, suggesting the real time supply and demand dynamics in the market have been tilted toward the bearish side of the ledger.

Both the leading indicators of growth and liquidity continue to suggest growth will slow as 2023 progresses.

Following this week’s banking crisis and the return of government bailouts, investors and traders alike are once again calling for a Fed pivot.

The long-term outlook for stocks remains questionable, as most of my leading indicators of risk assets suggest sub-par performance over the next year or so.

The long-term outlook for stocks remains questionable, as most of my leading indicators of risk assets suggest sub-par performance over the next year or so.

The credit cycle lies at the heart of our financial system.

We are now seeing clear signs of a broad-based decline in inflation.

With wage growth still strong and unemployment low, the labour market is still historically tight. For now.

Oil prices continue to struggle as recession fears have curtailed the market is recent months.

Over the long-term, the fundamentals of the dollar suggest a downward bias is likely.

The credit cycle and the economic cycle are excellent leading indicators of volatility.

The Fed’s mandate is stable prices and maximum employment.

Stocks are overbought and overvalued relative to bonds.

Regardless of your long-term view on bonds, Treasuries are beginning to look undervalued from a cyclical perspective.

Yes, inflation is peaking.

As a result of higher mortgage rates, an oversupply of housing and falling demand, the downturn in the housing market is only just getting started.

The physical market for energy continues to be tight, signally demand continues to outpace supply.

Rising and positive real yields continue to be a major headwind for gold over the short-term.

Despite crypto markets being one of the hardest hit throughout the bear market that has engulfed almost all risk assets over the past 12 months, we have seen crypto not only hold up relatively well since the June lows but indeed be one of the better performing asset classes.

As has been the case in recent weeks, the stockmarket finds itself in a position where various technical factors, market internals, positioning and sentiment are suggesting this sell-off may be overdone and a short-covering rally due.

In recent months, the economy has shown remarkable resilience in the face of a cyclical downturn.

A number of key technical, sentiment and flow based indicators are suggesting we could see a relief in selling pressure over the coming weeks, and perhaps a countertrend rally in risk assets.

The Fed’s mandate is for stable prices and maximum employment.

A number of key technical, sentiment and flow based indicators are suggesting we could see a relief in selling pressure over the coming weeks, and perhaps a countertrend rally in risk assets.

Though we are seeing the makings of some favourable readings in many on-chain, derivatives, technical and sentiment indicators, the macro and liquidity environment moving forward remain a significant headwind for crypto assets.

Through rising real yields, a slowing economy and poor seasonality, short-term headwinds remain for gold and precious metals.

Through rising real yields, a slowing economy and poor seasonality, short-term headwinds remain for gold and precious metals.

Through higher mortgage rates, demand for US housing is beginning to wane.

Central to my market and macro outlook at present is the likelihood we are amid a growth cycle downturn that is looking to decelerate meaningfully in the coming months.

In answer to this question, yes, it appears we are very much amidst a bear market rally. In fact, as I will endeavor to articulate below, it appears said rally could extend further over the coming weeks.

Volatile is the best word to describe the price action in crypto markets of late.

For some months now I have been banging the drum on how economic growth has been slowing and is set to meaningfully deteriorate come the middle of 2022.

It has been a tumultuous start to the year for crypto markets to say the least.

It has been a tumultuous start to the year for crypto markets to say the least.

What has been a tumultuous last few months for crypto markets has only accelerated through the turn of the New Year.

Not much has changed in regards to my economic growth outlook going forward since my most recent growth cycle update.

After what has been a torrid few weeks for crypto and traditional risk assets alike, we are beginning to enter what could be an important make or break point in time for crypto markets.

It appears as though we may be heading towards an inflection point in early 2022 whereby we begin to see the rate of growth continue its deceleration to the downside. Whether inflation follows suit remains to be seen, though my base case in the direction of change in inflation could surprise to the upside again in December and perhaps even January.

Since the Fed’s September FOMC meeting and official taper announcement, we are witnessing what appears to potentially be a shift back into the reflation trade.

Whilst the industrials sector has only fallen about 7% from its highs set in May of this year, as proxied via the XLI ETF, the extreme washout of sentiment and breadth within the sector presents a potentially favourable buy-the-dip opportunity for long-term investors.

The inevitable introduction of Central Bank Digital Currencies (CBDCs) could be the most historical and fundamental change to the global financial system since Bretton Woods. In almost any iteration, CBDCs could completely revamp the global financial system as we know it.

In a recent post I opined how the stock markets internals are weakening, whilst also briefly touching on how a couple of leading economic growth indicators are beginning to roll over.

The impacts of passive investing are not as well understood as they should be.

Within my latest piece discussing the merits of deflation, I briefly touched on how several leading economic indicators appear to be signally growth may have peaked for the time being.