Survival

Happy Friday,

And rarely has a Friday been more welcome - what a week, from Wednesday's equity punch out to Yield Curve (YC) inversion and so much in between.

Is a NT bottom in for equities? Ned Davis Research notes that in 9 prior occurrences like Wed SPY was up 100% of the time 3 months later. Alternatively, press down could continue thru Labor Day for entry pre Fed, ECB, OPEC + Sept meetings. (SPY 3-4% above 200 day)

The FI schoolyard bully fight continues with rates back to 2016 lows as duration bullies ignore BTE retail sales and higher inflation; do yourself a favor and note what happened next in 2016 (hint, no recession).

Markets have driven through some real potholes: Argentine melt down (lack of contagion speaks volumes); cracking 7 in the RMB (what FX war); and most importantly YC inversion (ok what’s next - avg 19 months to recession and + 13% SPY perf before peak).

Remain on Lower For Longer Global Growth Path & focus on Big Four Signposts: Global Easing Cycle; Trade Front (market response suggests limited further action); Global Growth Bottom (mixed data flow); and EPS bottom (Q2 BTE in US + EU).

Finally, did you note CNBC's Markets In Turmoil banner this week? Great contra indicator: since 2010, SPY up next one week, one month & 3 months.

Have a great weekend - you deserve it!

Jay and Jamie