As we saw from today's surprise drop JUN Consumer Confidence conensus & my own estimates can certainly be wrong.
I cannot emphasize enough how much my own bias & estimates rely on the seasonal up-swell of Existing Home sales into summer that will drop off into fall & over winter.
A lot of hopium is being placed on increasing home sales & price stabilization as a market bottom rather than my PoV that it is simply an ongoing disaster mitigation event.
Summer draws down = home sales draw down
Home sales draw down + increasing unemployment = more home inventory
More home inventory = drop in prices
Drop in prices = decreased homeowner equity/net worth
Decreased homeowner equity/net worth + increasing unemployment = decreased consumer spending
Decreased consumer spending = smaller EPSs
Smaller EPSs + same PE ratios = dropping market
If both EPSs + shrinking PE ratios = rapidly decaying market as money flows out of equities & commodities and into $USD & treasuries.
The good news is that gas prices should also drop!
"Yes", deflation concerns will be back on the table.
What I don't know is how government spending/overt jobs bills will counter any drop in consumer spending.
