Had enough? S&P plunge could deepen if recession takes hold
The S&P 500 came into this week having already plunged roughly 24% from its record high earlier this year. But history shows the average
Recently, the pain has been even worse than that. The last three recessions have seen the main measure of the
How stocks behave around recessions isn't an academic question. With the
The housing industry has already been hit hard by the leap in mortgage rates that have resulted from the Fed's moves. Sales of new homes sank in the summer to their weakest level in more than six years. Growth has slowed elsewhere in the economy too. Manufacturing is expanding at its weakest pace since the 2020 recession.
The jobs market is still doing well and unemployment is very low, as employers continue to hire hundreds of thousands of workers every month. That's actually discouraging to
The good news for wage earners will likely spur the Fed to aggressively hike interest rates further, and keep them there longer. Higher interest rates will slow the economy by making it more expensive to get a loan to buy a house, a car or anything else on credit.
High rates also hit the two main levers that set stock prices. On one hand, they can drag down corporate profits by making borrowing more expensive, and lower sales through a weaker economy.
On the other hand, high rates change stock investors' risk-reward calculation: Investors can get relatively better returns by buying safe bonds, which draws money away from riskier stocks.
Do we need economic pain to have gain?
With rising rates and rising debt, the taxpayer bill is finally coming due
Health/Employee Benefits News
Life Insurance News