Europe's Energy Crisis Deepens: Another 2022-Style Selloff Looms

Europe is facing another energy crisis, with natural gas inventories at their lowest levels since 2021. This has raised concerns that markets could see a repeat of the 18% decline in the S&P 500 in 2022.

The analyst behind this warning notes that European stock markets held up relatively well after the 2022 energy crisis, but cautions that this time around, the situation could be worse due to a brewing diesel crisis. The US may try to protect itself by limiting diesel exports, which would only exacerbate the problem elsewhere.

The analyst is positioning their portfolio defensively, raising cash and investing in defensive stocks while reducing energy positions on rallies. They note that the fallout from a global economic crisis cannot be avoided.