The conditions that led to a market being able to recoup most of its late 2018 losses are no longer in place.
Here are 13 reasons why it's different this time:
-- We are closer to an earnings recession than in the fourth quarter of 2018.
-- At year end the domestic economy was prepping for a +3% Real GDP in the first quarter of 2019 -- now Real GDP is expected to slide to be below +1.5%.
-- The Cass Freight Index is showing profound weakness and other high frequency economic data is weakening.
-- Markets have already priced in multiple interest rate cuts.
-- With rates so low now (10-year Treasury yield is down nearly 100 basis points), there are few tools left in the monetary shed.
-- The prospects for any meaningful fiscal stimulation is gone (e.g., an infrastructure build) as the animus between the parties has intensified and will continue to erode as we move to a November, 2020 election.
-- As mentioned in my opening missive Friday, global coordination and cooperation is at an all-time low.
-- A relatively smooth and non disruptive BREXIT is no longer likely.
-- The trade backdrop is a mess, with disputes with Mexico and China (in particular) probably going to continue for quite a while.
-- The geopolitical backdrop has deteriorated, particularly with Iran and North Korea.
-- Commodities are falling (especially of a crude-kind).
-- China's economic growth is no longer stable -- it's moving lower (see Thursday night's manufacturing data).
-- Technicals have just begun to erode.
(This commentary originally appeared on Real Money Pro on May 31. Click here to learn about this dynamic market information service for active traders and to receive Doug Kass's Daily Diary and columns from Paul Price, Bret Jensen and others.)