They bought the rumor, sold the news, and now investors are back to their real obsession: imagining what a recession looks like in equities. It’s not a pretty picture.
Making it worse are feedback loops, many of them emanating from markets themselves. Headlines hit, shares tank, nerves fray, travel is canceled. Shares fall some more. And while dynamics like those are always what derail rallies, it makes the challenge of visualizing the future no easier or less urgent.