Business

The last few weeks have seen 'Project Fear' taken to all new levels by the UK establishment as doom-mongering over a possible Brexit conjure images of post-apocalyptic movies. UK PM Cameron and Chanceller Osborne's latest op-ed tirade warns of 800,000 jobs lost and an "immediate year-long recession" if the Brits exercise their democratic right to vote for sovereignty over tyranny. Judging from the polls, which show Brexit odds tumbling, the fear-mongery is working, however, the markets disagree as forward volatility measures near 2016 highs.

Submitted by Michael McDonald via OilPrice.com,

One reality in the markets is that despite the best efforts of analysts and traders, no one ever knows with any degree of certainty what will happen to the price of an investment in the future. Oil exemplifies that premise right now. All year there has been a tremendous amount of discrepancy in predictions for oil prices with some commentators looking for prices of $10 a barrel and others expecting prices near $100.

So much for the huge China credit impulse spreading around the world. After this morning's extremely disappointing European data, US Manufacturing's flash PMI for May printed a disappointing 50.5 - its lowest since 2009.Under the surface the state of American manufacturing is even more disastrous as Markit notes, output is falling for the first time since the height of the global financial crisis, with factories hit by slowing growth of order books and falling exports.

It has now been a year since stocks hit a new all-time high.

Hard to believe, but for all the gyrations and Central Bank interventions, the S&P 500 remains well below it all time high of 2130 established May 21 2015.

Why does this matter?

Because it greatly increases the odds of stocks entering a bear market.

As Jeff Hirsch noted late last week, going back to 1929, there were thirteen times that stocks failed to hit a new all-time high for a period of 12 months. 

When it comes to European stocks, Deutsche Bank has made up its mind: sell in May and don't come back at all this year.