Another day, another yield-driven market shock, and another down day for the S&P which is now lower for 6 consecutive days, the longest stretch since February 2020 when the world was about to shut down (worse, as the last chart at the bottom of this post show, stocks are now officially in meltdown pattern mode... read on).

For those who don't see the pattern yet, it's simple: with central banks seeing who can outhawk each other the most every day, even as their governments vow to go into a debt-funded fiscal overdrive at a time of rising rates and QT, yields are predictably surging, and real yields are surging even more with real 10Ys hitting 1.63% today, the highest since April 2010. And since real yields track fwd PEs, it's getting uglier and uglier in risk land. Alas, it will likely get much uglier, as fwd PEs could drop as low as 12x.

Throw in some mild recession E of around 200-210 and you end up with S&P around 2400, a 50% drop from the market's all time high this January.

Of course, it's unlikely that the Fed will allow all of its wealth effect legacy to be wiped out just because it can't grasp that CPI and PCEs are backward-looking data sets, but at the current pace stocks still certainly keep making new closing 2022 lows until the Fed is confident that inflation has been defeated (which of course is idiotic since the moment the Fed pivots, all commodity hell will break loose).