Last week saw a collapse, a tremendous turnaround that suddenly looks
like a runaway bull market? The price action is screaming further upside.


The only caveat being continuing heavy question marks over the state of
the economy and the prospect of continued aggressive rate hikes.

The bulls of course have an entirely different view on both points.
Mostly hinged around the idea that US rate hikes will take a pause toward year
end, and the economy will bounce back.

There was good data on Friday in the form of US Personal Spending coming
in at 0.9%. Taking into account, price rises the number was 0.7%. It is a good
number, but by no means a get out of jail free pass.

US consumer confidence and industry activity data is clearly softening
and this is coming on top of a negative first quarter GDP result of -1.5%. So
not a strong economy by any means. There is hope, but the rate of interest rate
hikes is going to have a very real world impact on small and medium sized
businesses as well as generating significant mortgage stress over the next 1-3

The Federal Reserve may pause at some point to see how the economy is
coping with the additional burden of higher rates, but it will not stop for
long in its pursuit of extreme inflation.

Markets may want to forward look and discount rate hikes, but in the real
world on Main Street they are only just beginning to bite.

We saw a 400 to 500, point rally in US500 index a couple of months ago,
which resulted in a return to downward momentum and fresh lows.

Given the fundamental backdrop is continuing to deteriorate on Main
Street, the ‘look across the valley’ approach of this Wall Street rally could
face demolition through coming weeks.

Excited upward price action to be sure. ‘Sustainability’ remains


ACY Securities Chief Economist. The view expressed within this document
are solely that of Clifford Bennett’s and do not represent the views of ACY Securities.

All commentary is on the record and may be quoted without further
permission required from ACY Securities or Clifford Bennett.

This content may have been written by a third party. ACY makes no
representation or warranty and assumes no liability as to the accuracy or
completeness of the information provided, nor any loss arising from any
investment based on a recommendation, forecast or other information supplied by
any third-party. This content is information only, and does not constitute financial,
investment or other advice on which you can rely.

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