For large parts of 2022, markets stuck to the idea that bad news is good news. The context of that is softer economic data will keep central banks from tightening too aggressively. However, that narrative hinges on the fact that the data comes in soft but not too soft I would say.

And then we got the US retail sales data yesterday here. It looked like the same old playbook alongside the softer PPI figures, until it just wasn't the case. US stocks opened higher but subsequently fell throughout the session as Wall Street felt some form of angst one way or another. Was it stoked by hard landing fears? Perhaps.

There have been worries about consumption activity holding up and if the signs continue to point in this direction, it could really stoke market fears even more moving forward. If you pair that with recession-like performance in the manufacturing sector, things could get quite uncomfortable for those expecting a "not so bad" outlook.

The technicals could also have been a factor in trading yesterday as the S&P 500 fails to solidify a breakout above its 200-day moving average. However, more mixed feelings among broader markets in needing to balance out between a soft landing or hard landing, as well as how the data will factor into the central bank outlook means trading this year will not be as straightforward as we saw previously.