No Recount Needed -- Market Fears This 'W' More Than Anything

In this bowl of alphabet soup that's being utilized to describe this economic slowing, several scenarios -- V, U or L -- are being discussed; right now the market seems to believe it'll be something between the V scenario (a sharp recovery) and a U (a longer downturn and a slower recovery).

But there's another scenario out there -- a W scenario (nothing to do with the current resident of the White House), which entails a brief rebound in economic strength that calms the markets and consumers, followed by a business-led plunge in growth that ultimately pushes the economy into a recession.

Right now, there's a sharp difference in the data that focus on businesses and those focus on consumers. There's ample evidence to show that consumers are still spending money and remain relatively confident that things will be OK, while businesses are looking at things through a much foggier set of lenses.

The assumption for the coming months is that a rebound in consumer spending following the end of last year will pull the economy from its straits, and ensure that it moves to a period of growth again. It's clear that consumer spending improved in the early months of this year after dropping sharply in November and December, and consumer confidence rebounded in March. ...