For the US economy, bad news is actually bad news

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Chances of a recession

For years during the stock market recovery, the bad-news-is-good-news theme has been central, the notion being that weak data would ensure strong central bank intervention.

With the Fed now on the sidelines and, in fact, hoping to tighten policy, that truism is under heavy assault, to the point where the recent spate of bad news has been just that, with no effective relief from the U.S. central bank or any of its global counterparts.

There's been plenty of bad news as well, with a fresh batch dropped on the market Thursday.

Read More Three incredible facts about the market's horrible run

The Philadelphia Fed's manufacturing index registered a negative reading at -3.5, confirming that the sector on a national level is in a recession. Worse, the six-month forward outlook in the survey hit 19.1, its lowest point since November 2012, as did the employment component. While manufacturing is just 12 percent or so of the U.S. economy, contraction in the sector has been "very predictive of underlying turning points in the broader economy," said Joseph LaVorgna, chief U.S. economist at Deutsche Bank.

Recent optimism over the jobs outlook was tempered by a rise in weekly jobless claims to their highest level in six months. That came on top of data earlier in the week showing the economy is still not generating a healthy inflation level, some 6 ½ years after the end of the Great Recession.

Thursday's rally not withstanding, equity markets around the world are tumbling, with some major indexes in bear market territory.