This is not a volatile market, it’s a declining market.

“You bring me nothing but down.” That letter from Sheryl Crow was running through my head this morning as stock futures and Treasury prices resumed their decline after yesterday afternoon’s typical post-Fed “relief rally.”

that’s what you I must be careful for now. If you’re reading this column, you’re smart enough not to waste your time in front of Fin TV during the day, but I occasionally catch clips on YouTube. To do no listen to any so-called expert telling you that this is “market volatility”.

No, no, no, a thousand times no.

What we are seeing here is an asset price reset, not the occasional short-term pricing that can lead to opportunistic buy points. This is not a volatile market, it is a declining market. This is a huge difference and one that can be very expensive if ignored.

The first rule to follow is that the stock market follows the bond market. Look at this chart and show me where you see volatility.

There is none. There is only one simple reverse ski slope. Again, forget about the 15-minute shimmies and look into the forest for the trees. Bloomberg’s US Rates and Bonds page is essential reading. In fact, I’ve been reading the page so often today that I haven’t even taken Wordle yet. First things first, I think.

See the changes for a month and a year. Yield on the 10-year UST increased by 53 basis points in one month and 184 basis points in one year.

This is contractionary, as kids would say “AF”. You cannot rotate this. Any Wall Streeter talking about a “soft landing” should be immediately silenced this morning.

As you may have guessed, I have a template portfolio for this. It’s short. Like my portfolio of anti-Big Tech models, the FKBGT continues on its majestic run, now up (i.e. stocks within it are down) 45% since the start of noon 4/13, it is SHORT that is now in post-Powell vogue. SHORT hasn’t been quite like the shriveled violet, with a 22.3% gain since beginning April 11, but these aren’t dreamy names of flying electric cars, they’re the backbone of the US economy. And much like the idiots who run this economy in DC, across the country this column is bent. Now, in addition, the column will suffer as funding costs rise by another 75 basis points, with more to come at the FOMC meetings in June and July, it seems.

Watch the 10 names in SHORT.

GM (GM), Ford (F), Stellantis (STLA), Wells Fargo (WFC), Bank of America (BAC), Lennar (LEN), DR Horton (DHI), Progressive Corp (PGR), General Electric (GE) and Berkshire Hathaway (BRK-B).

I have no particular animosity towards these names, unlike the horrible cesspool that is the social media world which comprises a major FKBGT loophole. I followed GM, F and Stellantis’ predecessor DaimlerChrysler for many years, and my mother was a stockbroker at Wells Fargo for decades. Also, amidst the constant obfuscation, I am pleased to read the truth coming from BAC stock strategist Michael Hartnett, who – along with MS strategist Mike Wilson – is dead in this dead stock market in 2022.

No hard feelings towards any of those 10 companies in SHORT, just a tough backdrop for companies that make cars, build homes, and provide financing and insurance for those purchases to make a profit. We’re nowhere near the market’s acceptance of an earnings slump. I’ll leave you with one more link/quote from my favorite source, John Butters and his latest weekly product FactSet Earnings Insight:

For CY 2022, analysts are projecting 10.4% growth in earnings and 10.5% growth in revenue.

Crazy.

Even Jerome Powell and Janet Yellen aren’t ignorant enough to believe Wall Street here. Indeed, much smarter real players in the economy, like Elon Musk, have a “super bad feeling” about how this economy will react to higher rates.

Real money readers are not irresponsible technocrats, which is why I love you. I learn 100 times more from the reader feedback I get than any number I create. Keep coming (WhatsApp group access is via the phone number at the top of my linked spreadsheets) and for God’s sake see the forest for the trees. Be SHORT. It’s still not too late.

(Ford is a holding company in Action Alerts PLUS member club. Want to be alerted before AAP buys or sells F? Find out more now.)

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