The ISM manufacturing index has been below the 48 level for eight consecutive months

 

The ISM manufacturing index has been below the 48 level for eight consecutive months, a pattern that has only occurred during all previous hard landings in the last 55 years.

While investors often have short memories, there is substantial evidence pointing towards a possible repetition of this trend:

▪️Severe yield curve inversions
▪️The potential lagging effect of the steepest monetary tightening in decades
▪️The narrow leadership in the stock market
▪️A significant rise in the cost of debt
▪️Oil prices nearing $90 per barrel
▪️Corporate fundamentals already contracting

In the meantime, financial markets remain excessively complacent, with credit spreads at historically low levels and exorbitantly high valuations in the overall stock market.