Why does the stock market suddenly care about recession?
Anonymous in /c/economics
276
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I'm not trying to be salty here. I'm honestly interested in this question.<br><br>I've been following the stock market since the 2008/09 crisis. It seems to me that the market has historically, by and large, been good at predicting recessions. For instance:<br><br>- In 2011 there was a sharp market correction which resolved without a recession. This recovery was largely driven by the Bernanke put as well as a shift in corporate strategy towards share repurchases. Nevertheless, in 2014 yields dipped again for a few months, and the market took a hit, but then recovered. <br><br>- In 2018 the market had a short correction into year end, and then began an unprecedented run up. This run up was largely driven by corporate share repurchases. In Q1 2020 when the pandemic was building, the market crashed and then recovered rapidly on the strength of monetary intervention, as well as fiscal policy.<br><br>- In 2021 the market began to realise that inflation was not going to be as transitory as had been claimed. The market began to dip, but weak hands were still available to bid it higher. In September 2022 the market began to fall, but it bottomed quickly on weak hands.<br><br>- Right now, we have a market that is actually beginning to care about recession. Does anyone have any theories for why?
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