Some of the best charts from the week that tell a story about the markets and economy.
Non Recessionary Bear Market
The recent bear market is consistent with the average non-recessionary bear market. It lasted for 282 days and resulted in a loss of 25.4%, which is very close to the average decline of -25.0% lasting 254 days. The odds of a recession are decreasing as inflation cools and the US economy continues to grow.
Bear Markets Move Quick
The market has been recovering quickly since its October low, which was slightly over 9 months ago. We have seen a 28% increase from the bottom and are approaching new all-time highs. This is a good reminder of why it’s important to avoid selling stocks during a bear market.
Dow Jones Historic Winning Streak
The Dow Jones 13 day winning streak ended on Thursday. It was the longest streak since 1987. We haven’t seen a 14 day win streak since 1987!
For those who are not familiar, the Dow Jones index is a widely watched benchmark for US blue chip stocks. As of yesterday’s close, the index is up 6.40% year to date.
US Economy Continues to Grow
The U.S. economy grew at a faster rate than expected over the last few months, with gross domestic product increasing by 2.4% in the last quarter. It’s hard to have a recession with GDP prints like this.
Inflation Hits Two-Year Lows
The annual inflation rate in the US slowed to 3% in June of 2023, the lowest since March of 2021. Recent data suggest that the spike in U.S. inflation seen over the last two years is finally going away. This is very promising for the “soft landing” narrative, as inflation continues to decrease without a major drop in unemployment or an economic contraction.
And that’s all for this week. Check out my Twitter (@ChicagoAdvisor) for more frequent updates. Have a great weekend!
George Maroudas
847-550-6100
george@pmgwealth.com
Twitter @ChicagoAdvisor
Disclaimers/ Sources:
Non-recessionary bear market chart from @ChicagoAdvisor. Data from YCharts.
Bear Markets move quickly from @ChicagoAdvisor. Data from YCharts.
Dow Jones win streak from Reuters. Chart from Liz Ann Sonders on Twitter.
The U.S. economy continues to grow from U.S. Bureau of Economic Analysis.
Inflation Hits Two Year Lows from CNBC.
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