What do the Federal Reserve, a recession and the economy have in common? The short answer… the stock market. The ten-year treasury bond jumped 15 basis points today! In case you are wondering… that is a lot! It was enough to move the value of the underlying bond down one percent in value. Put that in perspective; the yield is 2.3%… that equates to 44% of the yield on a guaranteed asset lost in principle value (on paper or, in today’s terms, on my screen). That shows how much denial was built up by investors that the Fed would not pull the trigger on hiking rates by year-end.
The reality today sent the yield on the bond higher the value lower and stocks investors to the exits on the next stage of speculation, the economy will fall into a recession if the Fed does follow through on the move in rates.
Now that is called a pivot point for beliefs and stocks.
If we flash back to the ISM manufacturing number on Tuesday falling below the 50% level of expansion, you can at least connect the dots on how some believe we are headed for a recession. But, to make an assumption that 25 basis points on the short term rates from the Fed would accelerate the downside of the economy is a far stretch… even from where I sit. The ISM services numbers were out today and dropped to 55.9% from the 59.1% in October. That missed expectations and it was a big enough drop to garner attention from those worried about the Fed move on rates as well. Let’ face it… the economic data has not been impressive for several years. 
Growth is flat, earnings rising are a result of stocks buy-backs, top-line revenue has been on the decline for nearly a year, and wages have been stagnant. 
The result is obviously slow GDP growth for the economy. As I stated yesterday… fundamentals don’t matter, until they matter. Today they mattered.
I am not in the prophecy side of market analysis, but I have continually warned about the lack of data to support the move higher in the markets. 
When the fire starts… know where the exits are. I am will not be so bold as to state that today was the start of the fire, but someone let a match in a very dry forest.