With the US stock market falling like a concrete blimp today, it’s painfully obvious that darkness has descended across the equity landscape. Not surprisingly, the S&P 500 Crash Risk Index (a set of quantitative metrics collectively labeled as such on these pages) crossed the tipping point last Friday (Jan. 15) and will probably remain in an ominous posture once the carnage in today’s action officially goes into the history books. Let’s review a few details, if only for academic reasons.
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And that makes three in a row. Last Friday’s double shot of disappointing economic news in December for retail sales and industrial output was joined by today’s surprisingly soft numbers for residential construction.
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Inflation expectations in the US are sliding again, raising new concerns about the economic outlook. Perhaps today’s update on consumer prices for December (due out at 8:30 am eastern) will allay fears that disinflation risk has reaccelerated. Meantime, Mr. Market has been lowering his outlook for pricing pressure… again.
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● US Home builder confidence steady in Jan | USA Today
● US Economic Confidence Index Rises, Highest Since June | Gallup
● The Debate on Whether America’s Best Days Are Past, or Ahead | NY Times
● Confidence among CEOs sags as China’s slowdown spooks Davos | Reuters
● World faces wave of epic debt defaults, central bank veteran warns | Telegraph
● MSCI All-Country World Stock Index on brink of bear market | Bloomberg
● Mark Carney rules out imminent interest rate rise for UK | Telegraph
● UK unemployment rate fell to its lowest level since 2005 | MNI