Showing posts from June, 2022

"Davis Double Play ": Mr. Market & Asset Bubbles- Part 2

 I blogged about the concept of " Davis Double Play " ( here ) and explained that there are two very important components in determining the index of stock markets i.e P (Index)= EPS x PE Now, after the start of QT, we continue to see the market is adjusting to the "market expectation" of PE and compressing the PE to a more reasonable level. More and more data points showed that the US economy is slowing down from " Real Retail Sales, Housing Starts, Philly Fed Manufacturing Index, Empire State Manufacturing,  etc.." ECRI Weekly Leading Index Update   < Sources:> With such a high inflation data, the Consumer Sentiment by the University of Michigan also at a level never seen after GFC( Global Finance Crisis ), now is much lower than during the Covid-19 pandemic time. University of Michigan: Consumer Sentiment  (UMCSENT) It seems that the US economy heading towards recession is "inevitable" with FED turning more &q
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