as much as 14%, relieved grossly overextended conditions in mega-cap tech shares, punctured investor overconfidence and showed newcomers to trading that stocks don't always go up.If all that was needed after the racy summer rally was to unwind extreme chart readings and sow some self-doubt in bullish investors, it's not clear much more of a decline is necessary.
These are hints that the pullback is maturing, even if it isn't quite the case that the market is truly washed out or investor sentiment decisively pessimistic.The National Association of Active Investment Managers equity-exposure index has dropped from a multi-year high above 100 on Aug. 26 down into the 50s last week, a roughly neutral reading.
The weakness helpfully broadened last week beyond the Nasdaq giants and overheated speculative tech plays — in fact, the Nasdaq nicely outperformed last week after leading the tape up in August and down in the first half of September. This is probably another plus.
For most of the month, credit markets remained firm and Treasury yields almost static, which argued against a fresh buildup of economic stress reflected in the equity weakness. That said, market-based inflation expectations have slipped, the dollar rallied, which can be read as investor doubt in the Federal Reserve's ability to get inflation to its new, higher target and drive faster nominal growth.
Btmfd
Then, I guess, well done Market!
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