Below is a chart and excerpt from today's Early Look written by Macro analyst Ryan Ricci.
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Just by looking at the rate of change of total U.S. commercial bank asset’s these banks have been tightening since Dec 2021. More specifically, there was a large rate of change deceleration from Feb 2021 till March of 2021 (due to the largest base effects in their B.S. ever, ATHs). Then there was a much smaller re-acceleration until December of 2021 when the B.S. started tightening. What happened in January of 2022? The S&P 500 peaked on 1/4/2022 at 4,794. Essentially, one month after U.S. commercial banks started tightening the S&P 500 peaked. The chart below outlines this timeline. Oh by the way, this chart has not stopped decelerating just yet. |
