The S&P 500 has fallen 1.4% to 2657.46, while the Dow Jones Industrial Average has dropped 390.05 points, or 1.6%, to 24,557.62. The Nasdaq Composite has slumped 1.8% to 7,056.86.
It is amazing how quickly the market abandoned the bad news-is-good news narrative on the jobs report- the U.S. added 155,000 jobs, below economists’ forecasts-and focused simply on the bad news. The pace of the selling is surprising even some of the folks who were expecting bad news. “[On] balance we’re still a little surprised to see such a growing panic in markets develop quite so soon given the relatively benign economic backdrop,” writes Paul Ashworth, chief U.S. economist at Capital Economics. “That doesn’t necessarily mean markets will bounce back in the near term, before genuine signs of much weaker economic growth next year trigger a more marked downturn next year. Indeed, if this current weakness intensifies it could accelerate the economic weakness, by damaging confidence and hitting investment.”
Maybe so. But an optimist might look at the benign economic backdrop and see the possibility of better times for the market ahead.