Stocks had their worst day of 2023 after bad GDP data cemented an unexpected and extreme change in market sentiment. That negative GDP on the national economic report was the first in almost three years. This frightening trend has stoked stagflation concerns. This toxic cocktail of negative growth, weakened job growth, and inflationary wages has investors worried about the direction the economy is headed.
In April, the stock market crashed spectacularly. They scratched and climbed their ways back, an unusual phenomenon in the market. Even with this significant rebound, volatility exploded at the end of the month as investors digested some shocking economic reports. Remarkably, the market seemed to discount the reality that the drop in GDP was nearly the whole result of the input side. That missed call likely played a little too much to the rollercoaster dynamic of the stock market so far this month.
As April draws to a close, attention turns to upcoming tech earnings, which are expected to provide some much-needed cheer for investors. The technology sector often serves as a bellwether for market trends and could play a crucial role in stabilizing investor confidence moving forward.
April is usually a pretty crazy month for stocks. Sure, they can take a brutal beat down, but time and again they fight their way back to the top. When it does occur, it has usually created the low in the equity market’s selloff. 2008 is the outlier, but then when isn’t 2008 the outlier? -Market Analyst
The dark shadow of stagflation, as suggested by recent economic indicators, looms even larger, creating an added layer of uncertainty. The market had been sailing through very progressive, stable, waters. Today’s US data ignited investors’ worst fears.
Until the release of today’s US data, markets were savoring a slower/smoother landing path. The latest data set off investors’ worst nightmares. One economic guru lamented that we are witnessing negative GDP for the first time in three years. This coupled with weaker job growth and high wage growth is a compacted cocktail of stagflation.
As stocks recover from a rough bout of record-breaking losses in early March, Wall Street analysts are tentatively positive. There’s no denying that this type of volatility has us all wondering if this recovery can last past April.