While the market was delighted two weeks ago to see a delayed Q4 GDP print of 2.6%, which came in well above the expected 2.2% consensus number, we warned that "while Q4 was clearly a stronger than expected print, the real question is what happens in Q1, when most banks and nowcasts expect GDP to print below 1%, in some cases concerningly so."

Moments ago we got another confirmation of this, when following the latest retail sales report which saw a dramatic cut to December retail sales even as January surprised modestly to the upside, the Atlanta Fed slashed its Q1 GDP nowcast, and after rebounding modestly from 0.3% to 0.5% a week ago, it has once again slumped, and is now at the lowest recorded level, and just 0.2% away from economic contraction.

This is how the AtlantaFed justified its latest Q1 GDP cut, which as of March 11 was just 0.2 percent, down from 0.5 percent on March 8: "After this morning's retail sales report from the U.S. Census Bureau, the nowcast of first-quarter real personal consumption expenditures growth declined from 1.5 percent to 1.0 percent."

Meanwhile, while stocks continue to ignore the economic slowdown, bond yields were well ahead of the slide in the Atlanta Fed's increasingly gloomy forecast.

It appears that the now-certain Q1 earnings recession won't be in isolation, with the broader US economy also on the verge of contracting, if only for just one quarter. The question then becomes whether China's ongoing reflation attempts will be successful (although the February total credit injection was a major disappointment), and lead to a rebound in US growth in the second quarter. If not, what was expected to become the longest US expansion in history in June 2019, will be prematurely terminated by a technical recession just as Donald Trump was set to make a new economic record.