Welcome to ‘Pantophobia.’ Markets have a ‘fear of everything,’ says BNY-Mellon.

That was a BNY Mellon strategist summing up the market mood on Friday, as big earnings reports started rolling in from U.S. banks and tensions in the Middle East continued to build, pushing oil prices higher.

Bob Savage, head of markets strategy and insights at the bank, said instead of panic, there was an “orderly unwinding of the optimism that drove most of the week” until Thursday’s consumer prices, which put both peak rate and inflation views “back in doubt.” That’s even as annual U.S. consumer prices held at 3.7% and core slipped to 4.3%.

The problem, he says, is that service sector inflation is dominating the U.S. and in China where data also on Thursday showed flat overall inflation, but a 1.3% gain in service inflation.

“There is little evidence that rate hikes have much effect on such unless unemployment shifts and that failed to show up in the U.S. jobless claims just as it isn’t evident in most of the rest of the world from Korea to the EU where historic record low unemployment remains in play,” said Savage in a Friday note to clients.

The analyst said investors also remain confused about where they can find a haven investment “in a world with two wars threatening to escalate beyond their borders.

“The Ukraine story has taken a step back from the headlines but intertwines itself into the weekend ahead with the Polish elections and with the U.S. House Speaker race,” he said.

About the Author: Patriotman

Patriotman currently ekes out a survivalist lifestyle in a suburban northeastern state as best as he can. He has varied experience in political science, public policy, biological sciences, and higher education. Proudly Catholic and an Eagle Scout, he has no military experience and thus offers a relatable perspective for the average suburban prepper who is preparing for troubled times on the horizon with less than ideal teams and in less than ideal locations. Brushbeater Store Page: http://bit.ly/BrushbeaterStore