How did we get here? The rally out of the Covid downturn was euphoric in many areas, like hyper growths stocks, cryptos, SPACs, and private equity investments. The Fed prolonged the party in 2021, as did foreign central banks which continued to buy bonds, repress yields, and encourage speculators.

The S&P 500 rallied mightily off the June 17th bottom of 3,636 all the way up to 4,320 on August 16th; only to succumb to profit taking and Fed Chair Powell's sobering Jackson Hole, WY speech on inflation fighting priorities. In 15 trading days half of that rally was lost as reality set in that the Fed is not about to pivot to more easy money policy any time soon.

This "bear market" rally took place as the Fed continues to battle inflation by raising rates. PMIs (Purchasing Managers Indices) around the globe went below 50, indicating a global recession may be upon us. Another sign of a possible recession is the yield curve which is inverted at its highest level this cycle.

Ten of eleven sectors of the S&P 500 Index sank, with the exception being energy. Ten-year US Treasury bonds went out with a 3.03 % yield having hit 3.48% in the week before the end of Q2. The Gold Trust ETF (IAU) was positive all year but lost value in eight of the last nine sessions in June, ending down 0.2%, all data according to Bloomberg.

The S&P 500 continued its bearish trend in both April and May travelling from 4,604 on April 1st, to 3,810 on May 19th, before a 6% rally in the final week of May. At the lowest point of the year the index had dropped about 20% from January's 4,818.6 top, qualifying as a bear market.

April was an awful month for investors with bonds and stocks both falling, resulting in one of the worst starts to a year in decades. Wall Street has moved from euphoria to fear over the last six months.