Game of Trades: This Warned the SP500 Bull Traps in 2008 and 2001
It appears the economy is teetering on a recession… and yet it isn’t. At least quite yet. Corporate earnings have slowed. But the job market remains strong. Inflation has come down, but not as much as many would have hoped by well.
Expectations for a recession have been on the rise for over a year now. The peak for those expectations occurred in June 2022, and have since come back a bit.
Since then, markets have had some strong rallies, and recession fears have been declining. However, search trends for a recession suggest that all is not well.
Concerns about a recession rose in 2007 and peaked in early 2008. However, the economy did enter a recession, one of its steepest, in late 2008. Similar trends occurred in late 2019, well before the Covid panic in early 2020.
That suggests that a recession could be in the works later this year.
Another indicator is the unemployment rate. Typically, the job market reaches its full capacity near the peak of a bull cycle. The job market of the past few years has had some big gyrations, but we’re back near historic lows for unemployment.
In short, the signs of a recession are strong. So investors may want to scale back on their stock investments following the rally since the start of the year.