A warning from Wile E. Coyote

Market Ethos.
23 January 2023.

One of the most iconic Looney Tunes’ misadventures was the relationship between the Road Runner and Wile E. Coyote. The way the Road Runner always gets the better of the hapless coyote with his classic “Beep Beep” just as Wile E. happens to run off an unforeseen cliff into a deep gorge. Of course, with the delayed suspension midair before gravity suddenly decides to take over. Markets, like Wile E., can be so singularly focused on one thing (inflation) that they can for better or worse be oblivious to approaching danger (recession).

Markets are forward looking; they bottom well before the negative impacts of a recession ripple through the economy. At this point, the hope has been that cooling inflation is all that’s needed for markets to catch a bid. However, with all the focus on inflation (i.e., the Road Runner), markets may be overlooking the real risk of an economic slowdown. We touched on this in our recent Market Outlook.

Related articles

Market Ethos

Question time

March 24, 2025. Market Ethos. In any given month, there are many questions from advisors and investors. Here are a few succinct answers to these…

2 minute read

Market Ethos

Warning signs popping up

March 17, 2025. Market Ethos. The policy uncertainty and flip-floppery has worn down market patience. Markets can handle bad news, but unfortunately, uncertainty is more…

2 minute read

Market Ethos

Markets dislike the flip flop

February 24, 2025. Market Ethos. Is this not becoming exhausting? Tariffs on, delayed, on again, softened for autos/agriculture then delayed again. It would appear the…

2 minute read