In mid-January, well before the recent turmoil in financial markets, I wrote that although it is hard to bet against equities in the midst of an economic expansion, stock markets felt frothy, with excessive gains in recent months.
That would have been a good market-timing call. A period of steady, good economic news, including data on U.S. wages that raised fears of a more aggressive Federal Reserve in the months ahead, helped trigger a shift in market psychology. The sell-off that began Feb. 2 turned into a rout on Monday. Not a particularly welcome event for the new Fed Chair, Jerome Powell.