The late summer stall is now turning into something substantial. In 14 trading days, the S&P 500 has given back 9.22% which is more than half of what it gained in the previous two months. As I’ve said, all bear market rallies should be assumed to be phony until proven otherwise.
The big battle on Wall Street right now is for what the Fed will do at its meeting later this month. Some traders expect a 0.5% rate hike while others think it will be 0.75%. Thanks to Powell’s “pain” comment in Jackson Hole, the 0.75% crowd has the upper hand. Still, the jobs report gave the 0.5% hike faithful some ammo. My take is that we should listen to Powell. There’s going to be more pain ahead.
The 60/40 Portfolio?
The culprit isn’t hard to find. It’s inflation. Inflation acts like kryptonite to financial markets. This means that the two elements of the 60/40 portfolio aren’t balancing each other out. Both are down. Higher prices have caused bonds to fall. Plus, the Fed’s response to inflation has led stocks to fall.

Researchers say their prototype produces hydrogen with greater
than 99% purity and works in air as dry as 4% relative humidity
Researchers have created a solar-powered device that produces hydrogen fuel directly from moisture in the air. The prototype produces hydrogen with greater than 99% purity and can work in air that is as dry as 4% relative humidity. The device could be powered by solar or wind energy, and researchers envisage the device as a useful tool in regions where liquid water is not readily available for producing hydrogen.
Hydrogen is a zero-carbon fuel that yields only water as a byproduct when combusted. However, pure hydrogen is not abundant in nature and producing it requires energy input. Large-scale production commonly involves fossil fuels that generate carbon emissions.
The device is comprised of spongy material with a hygroscopic (relating to humidity) fluid that absorbs moisture from the air, similar in function to silica gel sachets. The absorbed water molecules are then split at electrodes into hydrogen and oxygen gasses, a process known as electrolysis.
The device is estimated to produce up to 93 litres of hydrogen a square metre an hour. Ten square metres of this unit can power a whole house, replacing natural gas for cooking and heating. The prototypes are still only small in size, and the team has plans to create 1 sq metre and 10 sq metres units in the coming year.
“It’s going to provide us with direction out of some pretty hard-to-mitigate industries such as transport. We have no alternative to diesel at the moment … hydrogen is a really good option.”