XLC - SPY: Get Ready For A Recessionary Bear Market

2024-05-10 11:58:12 ET

Summary

• The US economy is likely to enter a recession by the end of 2024, leading to a recessionary bear market for the S&P 500.
• There is some early evidence that the labor market is starting to deteriorate.
• Factors such as excess pandemic savings, increased immigration, and fiscal spending have delayed the recession.

The US economy is likely to slip into a recession by the end of 2024, and thus the S&P 500 is on the verge of a recessionary bear market.

Why a Recession?

The Fed was forced to hike interest rates in 2022/2023 from 0-0.25% to 5.25-5.50% in response to the rising inflationary pressures. As a result, the yield curve inverted, as the short-term interest rates exceeded the long-term interest rates....

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