150 Years Of History Says S&P Falls Another 15%. At Least

150 Years Of History Says S&P Falls Another 15%. At Least

It'll seem obvious in hindsight, as all things do. If the post-pandemic rally in equities ends up a smoldering ash heap, we'll chuckle incredulously at the sheer audacity inherent in the scope of the bubble we created. There are innumerable ways to visualize what some contend was unabashed folly, but the figure (below) from SocGen's Solomon Tadesse is among the most poignant I've seen. It's as astounding as it is elegant. The chart shows performance around all observed bear markets going ba
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6 thoughts on “150 Years Of History Says S&P Falls Another 15%. At Least

  1. But this time is different πŸ˜‰

    What is the percent lower (and in what time frame) that would cause enough companies to fail, hiring (and raises) to stop… such that people and companies buy (bid) less?

    Is there a natural post-summer splurge tightening or will this Recession rear more evidently in the biggest consumer spending moment, Q4 holidays?

  2. Reading this, I couldn’t help but conjure up in my mind some yesteryear wholesome actress, like Sally Field, playing somebody’s mom, slapping Jerome Powell on the wrist and saying “Now, just… just… stop messing with it! It’ll be fine. Now, go outside and play!”

    A bit too late for that, I suppose, by 20 years or so.

  3. Stagflation appears to be the most likely outcome – unless Western oil/gas sanctions against Russia (which are harming The West and enriching Russia) are reversed.
    With stagflation there is literally nothing the Fed can do to get rid of both of those problems at the same time. I am guessing the scales tip in favor of boosting the economy. Because it is one thing if the poor people storm the Federal Reserve because of inflation, but the Fed is likely even more afraid of the rich people seeking vengeance against the Fed after the Fed destroys their net worth.

  4. back to the data set presented … is the pandemic low a historical bear market in any sense other than numeric? H may be putting a bit of tangerine in the oranges w/ this one but if any merits that stretch, H does. sure glad I’m not a trader.

    earnings and CEO commitments to next 2 quarters of earnings will be worth watching (and remembering later – I’m going to write them down)

  5. Buyside probably expects negative 2Q reports/guides, while sellside estimates haven’t caught down.

    As always, will be Interesting to see if stocks go up or down on bad news, but with macro data moving rapidly and July FOMC meeting close on the heels of earning season, not clear why reaction to earnings will/should be a big factor in portfolio positioning, even in the short term.

    My for-what-its-worth two-cents-bet is “go down”, considering we’ll likely be coming off a quarter-end rebalancing rally and in the heart of the summer doldrums.

    Someone with better memory/charting skills can correct me, but I can’t think of (m)any times when SP500 put in a big, durable bottom in the summer months.

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