Remember That The Stock Market Is Not The Economy

Authored by Simon White, Bloomberg macro strategist,

Stocks are weakening despite signs the US economy is reaccelerating, as higher yields are beginning to degrade equity valuations. This is quite typical, with the market and the economy often operating out of synch.

It’s been a challenging few weeks for stocks, with their current drawdown now about 5%-6%. That comes as 2025 has opened with a robust set of data, with claims, ISM, PMI and employment all showing the economy is on a strong footing and whose pace could well be picking up.