The correction in risk assets intensified over the weekend. The drawdown on the S&P500 (-7.7%) is still within the range of previous corrections starting from the 2022 low - see Figure 1.
The Nasdaq100 is falling the most (drawdown) in this bull market, by as much as 14.4%. The rate of return after such a decline, counting from 12-Oct-2022, is currently above 64% for the Nasdaq100 and over 46% for the S&P500.
Markets are changing quickly now, just a moment ago the market was pricing in a 100 bps cut in the fed funds rate at FOMC meeting on September 18 (as of writing this comment it is only 75 bps).
All-in-all, the correction is sharp, but there is no sharp change of data at the macro level.
Even the US labor market report for July cannot be classified as "extremely bad". Similarly, the decline in ISM Manufacturing will not result in a sudden recession. Financial markets are sometimes all about emotions, and we have such a situation today.
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