• 287 days Will The ECB Continue To Hike Rates?
  • 287 days Forbes: Aramco Remains Largest Company In The Middle East
  • 289 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 689 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 699 days Big Tech Disappoints Investors on Earnings Calls
  • 700 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 702 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 706 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 707 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 709 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Equities And Treasuries Forecasting Past Recessions

One thing the 2007 recession taught us is how horrible the equity market was at forecasting economic contraction. The S&P 500 peaked in October 2007, just two months before the recession officially began. By contrast the 2001 recession saw the S&P 500 peak nine months earlier.

For whatever reasons this market has become far more short term focused. Macro events have less of an impact on price versus short term technicals or trade set ups. Whether it is due to the explosion of computer algorithm trading, intraday traders, ADHD no one knows.

The following chart highlights the last two recessions. Notice the forecasting ability of both equities and treasuries.

2001 Recession - begins Q1 2001

Treasuries peak January 2000, 11 months earlier

Equities Peak March 2000, 9 months earlier

2007 Recession - begins Q1 2008

Treasuries peak June 2006, 18 months earlier

Equities peak October 2007, 2 months earlier

Treasuries peaked most recently in April 2010, 13 months ago. The S&P 500 so far has peaked May 2011. Economic activity has rolled over since April. Are we looking at economic contraction in the next few months? The treasury market indicates we very well may.

 

Back to homepage

Leave a comment

Leave a comment