Taps Coogan – August 15th, 2022

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With markets having generally rallied up over the last couple months, but not yet breaking out of bear market formations, Danny Moses, the head trader under Steve Eisman of ‘The Big Short’ fame, recently talked to CNBC and warned of a pretty negative setup for markets moving forward.

Some excerpts from Danny Moses:

“I would say that I am not net long. There are always opportunities on both sides of the equation but the the stuff I am seeing right now, I think it is presenting set ups for shorts… Earnings are coming down. Layoffs are starting to happen. Fed rates take time to start to build themselves into the economy and its happening now… We’ve seen peak earnings for this cycle for sure. We’ve seen probably the lowest rates n this cycle… You would want to see 10-year yields moving lower, not higher, which is telling you something… 2-year 10-year inverted by 50 basis points is telling you something. Two negative quarters of GDP growth is telling you something. Purchasing power is diminishing because wages aren’t keeping up with inflation…”

“I think we’ve seen peak inflation but I don’t know what (the Fed can do)… There is no precedent for what we are seeing right now. Look what has already happened from the Fed doing very little. The builders have gotten hit…”

“What’s going to happen when corporations need to come back for paper to fund their balances sheets? It’s going to be a lot more expensive this time…”

There is more to the interview, so enjoy it above. 

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