The digital ink was barely dry on this morning’s post, which discussed the relationship between the S&P 500’s rolling one-year price return and the onset of recessions, when Mr. Market went into one of rare but far-from-unprecedented hissy fits. By the end of the day’s trading, the S&P had a new haircut with a price tag that pinched the numbers by 4.8%. What does it mean for the market’s forecast on the macro outlook? The good news is that even after today’s rout, the S&P 500 is still up roughly 6.5% vs. a year ago on a price basis. The bad news is that the margin of comfort is fading—fast, at least by today’s standard.
Daily Archives: August 4, 2011
What’s Up (And Down) With The Economy?
Is there a new recession looming? That’s the burning question (again) these days, and understandably so. The slowdown in job creation is reason enough to worry. As troubling as that is, there’s discouraging news on consumer spending and weak July reports for the manufacturing and services sectors. Adding to the anxiety is the fear that the push in Washington to cut spending at a time of weak economic growth will only exacerbate the problem, although the pro-austerity crowd argues otherwise. All of which sets us up for the latest update on initial jobless claims. Unfortunately, the number du jour doesn’t tell us much.