S&P 500 closed lower last week, reaching new lows, primarily due to the liquidity shock coming from the Treasury Bond selloff, as the nominal and real rates sharply increased.
Expect a strong rally as the liquidity risk eases, due to the peak inflation expectations (and peak Fed’s hawkishness).
Technically, S&P500 is near the bottom of the downtrend channel, which provides a solid support, but the 4000 level breakdown with the deepening liquidity risk can cause intensified selling.
Here is the full report:
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