After taking its hardest hit since the planet shut down for Covid, putting us in bear market territory, markets stabilized yesterday. It’s best not to get too caught up in the technical definition of a bear market – down 20% from a recent peak - because, while useful, those terms tend to over-shadow the events they define. If the White House’s line is to be believed, a better term would be “shock therapy.”

The 4717 shot: It’s not clear that the market does believe this. That makes the chaos less about the data but the method of decision making. The danger being that investment shifts from the best use of capital to a hedge against an unknown worst case scenario. That will sap market activity bad job numbers simply won’t. Our guess is that the administration wildly misjudged the level of the blow-back, but had also priced in that some version of this might happen and folded that into its calculations to put the harsh medicine in the rear view mirror long before the mid-terms raise their ugly head.