Greg, if COMPX grinds down another 10% over a period of weeks (beyond 5/16) and we starting getting confirmation that the Fed's tightening is having an effect on slowing monetary inflation, those would be pretty favorable conditions for a more sustained rally.
Unlike past recession/bear market scenarios, we have a gov't surplus versus deficit and a somewhat higher savings rate as a % of GDP. The money is still coming in... maybe not so much to tech funds... but it is there... and it can be "hot money" when psychology changes.
A lot of the recent macro stats imbed the ripple effect of the winter spike in crude. Since everybody is fixated on period to period increases, and not absolute price levels, the fact that crude has leveled out and OPEC appears content with the current price levels, is another positive. But it takes a while for all this to work through the #'s.
My own personal feel is that 50 bps short-term really ought to do it, (not that the Fed will give any inkling of such on 5/16 - people who are hoping for un-hawkish words in the 5/16 Fed PR are apt to be disappointed), once crude flattening, the "poor effect", and the natural result of higher rates on new construction spending start showing up in the numbers. I am not as panicked as some others about the labor market, which is a symptom, not a cause, IMO.
Just like every other mini-panic we've had since 1990, I have faith that when the outlook becomes more clear, and it will, in this case long-term rates will drop and equities will rally. Armegeddon this ain't.
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