We’ll see. The market is down today but has been solidly up for a few weeks (after a dismal start to the year). But the underlying economic reality hasn’t changed. The deep fundamentals are not good and they haven’t been good for a long time.
“Newly released U.S. whole economy profits data show a gut wrenching slump. Whole economy profits never normally fall this deeply without a recession unfolding. And with the U.S. corporate sector up to its eyes in debt,” he said in the note…
…Federal Reserve tightening may not be a necessary condition to catalyze a recession, according to Edwards, who believes that the deep profits downturn is sufficient in itself to push the U.S. economy overboard. He adds that the economy will “surely be swept away by a tidal wave of corporate default” and U.S. corporate debt should be avoided, even more so than the “ridiculously overvalued equity market.”