Why the Stock Market Is Ignoring a Slowing Economy

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Normally the stock market and the ISM Purchasing Managers Index move in tandem. That's not the case now.

It’s well documented—the stock market is ignoring the possibility of recession. History shows the gains could just keep coming.

Higher interest rates, engineered by the Federal Reserve in its attempt to quell economic demand and inflation, are starting to cool the economy. In the first half of 2017, the S&P 500 gained while the PMI slipped, and then the stock index rose 39% to the pre-Covid high.

 

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