Indicators To Watch During The Correction

The last week has witnessed the return of multi-directional volatility in the equity markets for the first time since just before the election in the United States last November. At this point we have little reason to suspect the 2% mini correction in the S&P 500 will turn into a major downside swoon. After all, even though domestic and global politics remain unpredictable, high frequency economic indicators such as unemployment claims, consumer confidence, retail sales, and PMIs remain moderately strong and suggest the 2% real economic growth environment continues (charts 1-4 below).