The conductor of the bust, Michael Hartnett of BofA, leads us off:
Tale of the Tape: Nasdaq up 11% from May 20th lows despite Brainard (Fed flip-flops back to hawkish), JOLTS (strong not weak), oil (up not down), CEO pessimism (“economic hurricane”), MSFT (lower guidance), Moody’s (no guidance), VC markdowns…note 8 CCMP bear rallies in 2000-02 saw minimum 18% gain = 13k bear rally target summer’22.
The Price is Right: oil prices annualizing 108% gain surpassed only in ’99 TMT bubble & ’74 oil shock (Chart 3); note oil prices up today despite OPEC surprise supply increase (648k b/d from 432k) + Biden visit to Saudi; sanctions/supply have dislocated oil market (see divergence between Urals & Brent – Chart 4); summer oil surge = bear surprise.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
