In the old days, when men were men, giants roamed the earth, and I was a securities analyst, it was the clear stock market belief–and also the fact, to my mind–that stock movements anticipated and foreshadowed economic events. For this reason, stock market movements have been regarded by the domestic economics profession as the leading indicator of domestic economic activity.

I still tend to think this way, as, I assume, many/most human stock market veterans do.

Over the past decade or two, however, I think the big global banks have systematically been shifting to the less expensive (no high-powered analysts to pay) tack of computer-driven fast reaction to public announcements of general economic or company-specific data.

If this is correct, we’re likely to see less anticipation and instead later-in-time but more rapid market reaction to company news. Maybe less of an impact from general macro data, or the opinions of economic gurus.

My sense is that the cause of the current market weakness that seems to be developing is that the negative effect of tariffs on company profits is just now beginning to become public–and that trading bots are beginning to do their selling thing.

My sense is that the reality is proving to be considerably worse than the consensus expects. If so, the next few weeks may get ugly–even in this, the world’s worst-performing stock market, year to date. Although a buy-the-dip strategy has worked well in the US so far this year, I’m thinking it might be better to take a week or so off before employing it again.