Correction Territory

Another brutal week for stocks, Sent the major averages into official correction territory with declines exceeding 10% on Thursday. Bloomberg noted that this was the 7^th fastest trip for the markets into correction territory. Taking just 16 market sessions to exceed 10% losses. Also, of note from a technical analysis perspective. The grossly oversold data. Is on a par with what was seen at the depths of the Covid panic in early 2020. Something that took 21 days to achieve.

For the week the S&P 500 lost 137 points or 2.37%, the NASDAQ gave up 442 points or 2.43% while the DOW plunged 1,314 points or 3.07%. With the markets dive into correction territory following 4 consecutive down weeks. Fridays substantial gains prevented even worse damage. With the markets surging on a last-minute budget deal to prevent a government shutdown.

What About The Recession?

The old adage about the mainstream media. “If it bleeds it leads”. Is as true today as it ever was. As their insistence of one negative story after another remains. Since President Trumps Inauguration. Not too long ago it was “Plunging 1^st Quarter GDP”. After the trade data skewed dramatically as companies rushed to order ahead of tariffs. Tariffs that were later delayed. Tanking 1^st Quarter GDP estimates as they went deep into the red at -2.8%. One month does not make a trend. With the end of the first quarter rapidly approaching the latest GDP estimates are increasingly positive. The NY Fed figures +2.7%, Morgan Stanley estimates +1.4%, the Atlanta Fed brings up the rear at -1.4%. As the graph below shows.

Will The 1^st Quarter Deliver?

Despite some notable price declines lately with energy, particularly oil, and by extension gasoline. Another media favorite eggs, have also seen significant price reductions lately as well. Even mortgage interest rates are starting to come down. Following all the budget savings, and hopefully deficit reductions achieved by Elon Musk and DOGE. Even with all this. Consumer inflation expectations as reported by the University of Michigan remain stubbornly high. Again, I’ll note that like the lamestream media. The University of Michigan’s inflation data, long considered the Gold Standard. Is heavily politized and needs to be taken with a large pinch of salt. As the chart below shows.