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In case your wondered …

Nov 09, 2022

In case you wondered, as we do, why the stock market is currently so resilient. We spoke previously about “Mr Market” climbing the wall of worries of high inflation, tighter monetary policy, (geo)political uncertainties, energy crisis, earnings downgrades and deteriorating economic conditions. Today we add one of the most important drivers: global money supply. According to Ritesh Jain from Pinetree Macro, the US Treasury pumped $165 billion into the economy since the start of Oct 22. This not only cancelled Fed’s $90 billion per month quantitative tightening but also increased global money supply with an immediate positive impact on the stock market. The correlation of the S&P 500 to global money supply has indeed been almost perfect in the past.

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