Bull market limps into 2-year birthday with soft economic landing in doubt and stock leaders failing

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Mike Santoli breaks down the current state of the stock market and whether a soft landing is still the base case.

The bull market was born nearly two years ago and has been sustained ever since by a sole premise: Inflation is falling faster than the U.S. economy is slowing. The downslope of price pressures was set to meet the steady advance of GDP at a crossroads called Soft Landing, at which the Federal Reserve could undo, in triumphant but deliberate fashion, the policy tightening that began two-and-a-half years ago.

Layoffs remain at subdued levels, wages continue to grow faster than inflation on a one-year look-back, even as unit labor costs have fallen such that productivity measures are rising briskly. Warren Pies, founder of 3Fourteen Research, finds that residential construction employment is a reliable harbinger of recessions.

 

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