Investors are suddenly worried about a potential recession. That means “bad news” on the economy might no longer be “good news” for the stock market.
Until recently, investors welcomed signs of a slowing economy, figuring it meant the Federal Reserve would soon stop raising interest rates, presumably in time to avert a recession as inflation cooled. Following last month’s banking troubles, investors appear more fearful of a potential downturn, market watchers said.
ADP on Wednesday said the private sector added 145,000 jobs in March, well below the 210,000 expected by economists. Jobless claims data on Thursday morning showed first-time applications for benefits last week came in higher than expected. Stocks have gained so far this year, after a tough 2022. The Dow Jones Industrial Average DJIA has gained 1% year-to-date, while the S&P 500 SPX was up 6.9% over the same period. The Nasdaq Composite COMP , which has been leading 2023 gains, has advanced 15.5% so far this year.On Thursday, the S&P 500 and the Nasdaq Composite booked their first losing week in four, while the Dow Jones Industrial Average gained a modest 0.6% in holiday-shortened trading.
For the past few weeks, the S&P 500 has been trading close to the top of its recent trading range of 3,800 to 4,200, so it’s normal to have pullbacks, said Infrastructure Capital’s Hatfield. However, as companies begin to report their earnings for the first quarter, it could set the S&P 500 up for a breakout above the 4,200 level, Hatfield said.
Fed CUT history aft hike cycle and SnP: 1995 -5%/+35YE - no recession fear. 1998 -20%/+26YE (avoided recession). 2001 -50% (mkt already in recession). 2007 -55% (mkt already in recession). 2023/24 ? (are we in recession?) I believe we are. Risk-off.
Suddenly? It’s all we’ve heard about for 3 years 😂🤣
How long have “they” been saying this
I’m not worried