Below the surface a bear market is taking hold

Japan’s 1989 stock market fever could only be surpassed by today’s US stock market craze. 

QE and government deficit spending were vital, but the fake economic scenario was not as important in Japan as it has been in the United States. 

Even at the 1929 peak, there was no quantitative easing, a far smaller government, and a considerably lower level of indebtedness. 

As a result, the long-term fundamentals of the stock market are currently at their lowest level in American history. 

Inflation has reached multi-decade highs as a result of quantitative easing and interest rate repression, which together pumped $4.5 trillion into the US stock market resulting in a bubble.

The Federal Reserve’s money-printing orgy, which has taken longer than predicted to end, is finally supposedly coming to an end. 

However individual stocks are being shattered one-by-one without affecting the main indices.

For each of the high-flying stocks, there are distinct reasons for declines. 

The experience is all the same and it represents what we see when people are trying to get out of a scenario in which the financial narrative has flipped to instability and loss. 

Today, losses are cropping up.

The following examples represent the breadth of decline change.

Since its peak, the Russell 2000 index, which tracks the performance of small-cap companies, has plummeted by 12%. 

Representing the future of the economy and tracking the most liquid and largest newly-listed securities of US companies, the IPO ETF, which includes Moderna, Snowflake, Uber, Cloudflare & Zoom Video, has plummeted 24% since February.

The number of new high-fliers on crypto exchanges has decreased by 41% since February.

Following the Chinese ADRs listed on the New York Stock Exchange is the Invesco Golden Dragon China ETF (PGJ). Since its peak in February, the ETF’s price has declined by 75%. 

The Nasdaq has fallen by 6% since the beginning of the year, including Friday’s decline of 1.9%.

On the surface, a growth narrative can no longer be supported because below, the absolute and relative changes to the downside have the earmarks for some bear narratives to take hold.