Caroline Baum: The stock market’s swoon demands a new narrative

Before Friday’s stock market rout, which pales in comparison to Monday’s biggest point-decline ever, everything was coming up roses for the U.S. economy. Synchronized global growth, low inflation, solid job creation, a strong sense of optimism among businesses and consumers, robust corporate earnings, aided and abetted by the recently enacted tax cut: What’s not to like?

All that changed Friday with a single statistic in a single economic report that fanned “inflation concerns” and triggered a synchronous stock and bond market selloff, at least according to press reports.

Monday’s 1,175-point, 4.6% dive in the Dow Jones Industrial Average DJIA, +2.33% was accompanied by a huge rally in Treasuries, more than erasing Friday’s losses.

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