, Columnist
Don't Mistake the Stock Market for the Economy
The selloff doesn't reflect solid global growth.
It may not be as bad as you think.
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The gut-wrenching moves in equities in recent days raise a number of questions. For one, are the declines indicative of an underlying problem in the global economy? And two, do the losses threaten to spark some sort of contagion?
It's still early days, but the answers lean toward a strong "no." What's notable about the selloff, which has seen the MSCI All-Country World Index drop as much as 10.7 percent from its highs in January, is that there hasn't been a mass grab for havens. Yes, U.S. Treasuries were in demand Monday, but that reversed somewhat Tuesday. And, other assets favored in times of turmoil have barely budged.