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John Authers

Beware the ‘Cover Curse:’ How to Tell When a Market Meltdown Is Overdone

Something significant is going on in the markets. The question is whether investors are falling victim to the propensity of extrapolating trends infinitely.

Something’s afoot.

Something’s afoot.

Photographer: Daniel Leal/AFP/Getty Images

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The last week might well go down in market history. Just to re-cap, central banks across the planet hiked rates aggressively, often by more than expected, and often with promises that more tightening was in the pipeline. In response, bond yields shot up, and equities sank to new lows for the year (outside the US), a fate that the S&P 500 only escaped with the aid of a dramatic late bounce on Friday afternoon. This is important stuff, bringing the economy into territory that few people much under 60 can even remember, at least during their working lives.