As the market falls, we go up!

Stocks in trouble.

Restrictions start to be re-introduced from China to New Zealand.

Good morning,

These are big falls we have had in US and Australian markets.

The unwinding of the Bitcoin nonsense is also a welcome development. My long term view that Bitcoin could go to the moon but would end at Zero, remains my central long term theme there.

The reason I raise it here, is that we are seeing widespread unwinding of tulip bulb style markets. Which is exactly what you would expect from a sustained to become entrenched potentially long term adjustment.

The breaking news, confirmed re evacuation of non-essential staff and all families from the US Ukraine Embassy, and the reported by New York Times consideration by Biden this evening to put troops on the ground, are both potential catalysts for further stock market declines.

My Keep It Simple message of buy the US dollar, sell Euro, sell Australian dollar, buy Gold and of course keep selling stocks, also remains in place.

The Markit economic data series globally is not one of my favoured sources of data, but IHS Markit PMI data for Australia today was all in line with what I have been forecasting for some time. The Australian economy is in far more trouble than most people appreciate. And in a longer term lasting fashion as well.

It looks like being an interesting week. Expect some volatility, but the dominant risk remains lower for equities.

Also of interest was Toyota saying they expect the semi-conductor shortage to remain a problem until at least 2024. The big correction in the tech sector may have much further to run.

Clifford Bennett

AUS200 Collapse Entrenched

Australian Services

IHS Markit Services PMI is declining sharply.

Australian Manufacturing

IHS Markit Manufacturing PMI is rolling over dangerously.

Eurozone Consumer Morale

Well below pre-Covid levels and suggests the best of the recovery phase is now behind us in regard to Europe as well.

Clifford Bennett

ACY Securities Chief Economist.

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