Happy 4th of July to all my US subscribers!
Stocks cheerily power higher, and the media spin machine, MAGA-loyalists, and Wall Street couldn’t be happier.
But beneath the surface, 3 warning signs emerge:
- Market fundamentals: Stocks have never been more overpriced, ever, while we’re at extreme levels of greed,
- Narrow market leadership: Now we’re down to just four stocks as being responsible for goosing the headline market numbers higher.
- Declining home sales and prices and weak retail sales: The consumer and housing are two of the most important legs on the economic stool. Both are weak and weakening further.
Add it all up, toss in a Fed that seems hesitant to cut rates (and why should they with stocks at all-time highs?), and maybe stir in a little bit of Commercial Real Estate mortgage-backed securities ugliness, and there’s no room for error here. Any little slip-up when everything is priced for perfection, and a correction could begin at any moment.
Finally, I also dive into the strange fact that UK and EU buyers for US Treasuries have once again just magically appeared and snapped up everything that needed to be snapped up to create the appearance of health in the US Treasury auctions.
I’m just a tad suspicious since these foreign buyers are getting absolutely clocked on those trades (-14% YTD) once you factor in the decline of the US dollar against the British pound and the euro.
by cmartenson 
