By Graham Summers, MBA | Chief Market Strategist
I warned that the Fed was going to break something.
Well, things are starting to break. The latest round of economic data was disastrous.
Consumer confidence collapsed to its lowest reading since January 2021. As if that wasn’t bad enough, the Expectations Index, which is based on consumers’ views on income, business and labor market conditions, COLLAPSED to 65.2.
That is the lowest reading in 12 years. And it’s WAY below 80, which is usually the level at which predicts a recession.
Similarly, the Philadelphia Fed’s non-manufacturing index imploded to NEGATIVE 32.5. This is the lowest reading since 2020 which was during a PANDEMIC.
The writing is on the wall… unless something changes FAST, something BAD is coming in the economy. And when something BAD happens to the economy, stocks get slaughtered.
The last time President Trump and the Fed got into a pissing match, stocks took out the 200-DSMA, bounced, chopped around for a few weeks and then the REAL fireworks began.
Are stocks about to repeat this? They’ve just collapsed rapidly taking out their 200-DMA.
