The meltdown that wasn’t: 5 lessons from Wall Street’s panic attack

?? Welcome to Trendlines. Today's secret word is “Walzonomics.”

I'm Boston Globe financial columnist Larry Edelman , and in this edition I look at what we learned from the stock market's brush with disaster.

Plus: How some people are abusing remote work to the max.

Trendlines is my twice-weekly newsletter for Boston Globe Media . Click the subscribe button to keep on top of business and the economy in the region and beyond.

?? Wild ride

Wall Street’s roller-coaster ride continues. Stocks were up on Thursday morning after losing ground the day before in up-then-down trading.

But the mood was nothing like it was on Monday, when a fear-induced plunge swamped markets around the world.

Investors, for now, have decided the world isn’t about to end.

So, what did we learn from this episode?

1?? Like young children, Wall Street doesn’t handle transitions well.

The Federal Reserve has spent the past two years fighting inflation with high interest rates.?

• Now, central bankers are pivoting to rate cuts, probably starting in mid-September.

• Part of Monday’s market meltdown reflected worries that the Fed was behind the curve, having left more time for restrictive rates to throttle consumer spending and business investment.

2?? Economic data can flash conflicting signals simultaneously.

• The unemployment rate has risen.
• Other measures — including gross domestic product, employer hiring, personal incomes, consumer spending, and retail sales — show an economy that has cooled to what the Fed considers a more sustainable pace.

3?? Nailing a soft landing is next to impossible.

Returning to 2 percent inflation without painful job losses in a globally linked economy with a gazillion moving pieces is unlikely.

4?? Investors aren’t always rational.

Monday’s big decline had little or nothing to do with the US economy — global investors were exiting a popular trade that was derailed by a quickly appreciating yen — but it rattled enough nerves that US stocks plunged when trading started in New York. The S&P 500 fell 3 percent.

• Economist and New York Times columnist Paul Krugman put it this way: “Most people selling stocks and other assets weren’t engaging in macroeconomic analysis; they were selling because prices were falling.”

5?? A final thought

The best way to track the economy’s health is to filter out the stock market noise and focus on fundamentals like GDP, jobs, incomes, and interest rates.

?? Trending

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Retail: How Stop & Shop is trying to avoid becoming the next A&P.

Markets: Investors exhale after US initial jobless claims fall by the most in nearly a year.

??? The Closer

There is a new post-pandemic work trend.

It’s called “quiet vacationing,” and it’s like hooky on steroids: disappearing for days, sometimes weeks, without taking vacation time. A couple of strategically timed emails here, some voicemails there, and no one is the wiser.?

As the Globe's Beth Teitell explains:

The gambit skews young, is distasteful to rules-followers, and depending on the company, could be grounds for termination.

“Do I think it’s ethical? I do not,” said management consultant Gina Abudi. “But someone else might say they have no problem with it.”

Taking a work-from-home break to hit the gym is one thing. Quiet vacationing? Sheesh.

Speaking of vacation, Trendlines is taking a summer break (please don't tell HR). I'll be back on August 22.

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Thanks for reading.