Andrew Sheets (head of cross-asset at MS):

“We strongly disagree with this ‘bad is good’ logic. The expectation that easing central bank policy can offset weaker data is at odds with both a broad swath of historical data and basic monetary theory. But since many in the market disagree, this feels like a good time to restate our case…weaker economic data have a major impact on confidence, causing further softness as businesses and consumers pull back, and making investors less inclined to pay up for promises of future growth. No economist, at least none we’ve met, will tell you that central bank policy is intended to eliminate swings in the business cycle.”