The 'Rock Star Stock Rally' is fading fast.

The economic data continues to point south at an alarming rate. The Dallas Manufacturing Index nose dived, and this comes after a broader manufacturing index actually contracted last week.

US Durable Goods were firm, but modestly so compared to the pre-Covid norm. The post-Covid euphoria has all but vanished from the US economic scene, and the picture continues to darken overall.

The G7 attempt to limit the price of Russian Oil is highly unlikely to succeed.

Nations such as India are unlikely to propose to Russia that it pays less for the Oil it receives. There will be many other cases of this. In the West, we seem to overlook that it is mostly Europe, the USA, Canada and Australia that have railed against Russia over its invasion of Ukraine. Much of the world, from Africa to the Middle East and parts of Asia have a far more neutral stance. Not everyone will simply accept an odd mandate from the G7.

The Russian Rouble is strong and the only reason for default really is a function of sanctions. It is all a very difficult situation and one which may require a far more nuanced approach to the energy market, than a simplistic G7 sledge-hammer.

As this reality begins to dawn on investors, we could see the Oil price moving significantly higher again in coming weeks and months.

So too will Gas prices as the US struggles to maintain even a portion of replacement supply to Europe. Then there is the prospect of actual rationing in Germany within weeks. This will again jolt all energy markets higher. While at the same time confirming a serious economic slow-down is afoot in Europe.

Despite the strong 'Rock Star Rally' last Friday, equity markets in general remain precarious.

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