CashSell stocks and go to cash, an analyst at BMO Capital Markets (BMO) urged clients Tuesday. With no end in sight for the European debt crisis, the global credit environment is worsening, wrote Mark Steele in a morning report, and that spells bad things for the stock market.

"Cost of capital is going up and availability is going down," the analyst said, adding that there are large gaps between where the credit market prices risk and where the equity market is priced. Furthermore, moves in the currency, stock and commodity markets "are mirroring the moves in the credit market."

As if on cue, the euro advanced slightly against the U.S. dollar early Tuesday, but still remained below $1.20. Gold prices hit a new record.

"Global growth, in a credit-constrained environment, will slow," Steele wrote. "Profits will be squeezed by the higher cost of capital."

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