Summary
- The S&P 500’s 3% decline isn’t a correction; the market’s recent distortions make minor pullbacks feel more significant.
- Credit spreads remain tight, indicating no real correction yet; widening spreads will signal the true market downturn.
- Earnings estimates for 2025 have declined, but the P/E ratio remains stable, suggesting a trading range rather than a correction.
- The market awaits cues from the credit market; the real correction will be confirmed by widening credit spreads.
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If you feel panicky about the stock market or think we are in a correction, you haven’t seen anything yet. The S&P 500 (SP500) has fallen about 3% from its all-time high, and based on headlines
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