From TheStreet’s “Dow Futures Tumble As Investors Retreat From Historic Wall Street Rally; US Economy Officially in Recession” posted early Tuesday:
U.S. equity futures slumped lower Tuesday as investors looked to book profits from an extraordinary rally for global stocks that continues to defy underlying conditions in major economies around the world.
The S&P 500 edged into positive territory for the year last night, while the Nasdaq 100 stretched to all-time highs in the strongest 50-day rally on record for Wall Street, fueled in part by trillions in central bank and government stimulus and hopes for a so-called V-shaped economic recovery from the coronavirus pandemic.
There is some investor concern, however, that markets have risen too far and too fast over the past two months, particularly when you consider that the Atlanta Fed’s GDPNow forecasting tool suggests second quarter GDP could contract by as much as 53%.
In fact, the Business Cycle Dating Committee of the National Bureau of Economic Research, the group which offers the final word on the official status of the U.S. economy, confirmed last night that it entered recession in February, thanks in part to the “unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy”.
The designation ends the longest expansion on record for the U.S. economy.
My take: Is this the start of the long-awaited correction?