#3 Macro & Business Insights
💡 How to stay focus in investing during a recession?
Hi all, and welcome back to The Macro & Business Insights!
My research will cover the follow points:
Which are the performances of the S&P 500 during the recessions
How much important is don’t make the mistake that the markets are the economy
How the markets perform once ended the recessions
Where we are now until the average end of the recession
We’re in recession, the S&P 500 is down 24% more or less, so the steps that we’ll take over the next months are important.
With this research we have seen how important is not follow the economy when we are in investor’s mode and which are the performances once the recession is ended.
The important part to read more than once I think is the constant of all recessions, that all bear markets of the past have ended.
We’ve seen another time how the longer term and the patience in this world can make the difference and you have to know that what you’re doing now is essential.
Household and business fundamentals still solid, but slowing.
US economic momentum slowing, recession risk at 50%.
Real incomes are falling, forcing households to draw down savings to support spending.
Housing is facing increasing headwinds of higher interest rates and falling post-pandemic demand.
Home builder sentiment and activity is now at its lowest level since June 2020.
The average maximum rally during bear markets has been 14.5%.
The median Fed projection for the terminal rate is 4.6% in 2023, implying one more 25bp rate hike early next year before holding steady (with no cuts) for the remainder of 2023.
The Fed believes it will have to raise higher, stay there for longer, and hurt economic growth more to bring inflation down.
Recessionary bear markets bottom 13 months from their peak on average, which would line up as early 2023.
The index has already declined 24% over 9 months, so the majority of this bear market’s weakness is likely behind us at this point.
Since 1871, there have been 30 recessions in the U.S., averaging one every five years. And in spite of that fact, the S&P 500® Index has gained 6.9% annualized over that time, after adjusting for inflation.
During the last six recessions, the S&P 500 Index has gained an average of 61% from its low by the time the official end of the recession was declared by NBER.
The one constant is that all recessions and bear markets of the past have ended, with new expansions and all-time highs following at some point in the future.
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Disclosure
This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. This material has been prepared for informational purposes only. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.