Pro Perspectives 3/17/22

March 17, 2022

We've talked about the irony of the Fed rate liftoff as a signal to buy stocks.
Remember, with the market valued at less than 19 times the twelve-month forward-earnings estimate, stocks are not expensive.  Not when the Fed Funds rate is, and will be, under the "neutral rate" for at least the next year (projected).  And not when the nominal price of everything is rising.  That includes financial assets/stocks. 
With that, let's take a look at some related technical signals …

After a 14.6% correction in the S&P 500, we get a technical break of this big downtrend.  
Same with the nasdaq …
Small caps (Russell 2000) and the Dow are approaching similar breaks …
What has led the way? 
Curiously, the rebound in global stocks started in Europe, early last week.  Take a look at German stocks … 
German stocks are up 16% since last Monday.  Italian stocks too (a far weaker and more fragile economy relative to Germany).
This, just as the world is cutting off Russia, and the European bank exposure to Russian debt has yet to be fully evaluated.  Not to mention, the European economy is the most vulnerable in the world to the Russia/Ukraine war impact, yet the ECB telegraphed a rate liftoff to respond to inflation.
So, what is this behavior in European stocks telegraphing? 
Perhaps, global war (and wartime fiscal spending)