what recovers from recession first?

[lazygood4nothinbum]

which goes up first, fastest & furthest, housing or stock market? how about which segment of each?

 

[FinanceDude]

Hard to know in today's ugly world.

In the stock market, generally small caps are the first to turn, and usually small cap value.........

 

[clifp]

Normally the stock market would almost always be a leading indicator with housing being a lagging indicator of the economy. In this situation who knows, because housing is the main cause of the problem.

 

[Razor]

I doubt if housing will come back anytime soon. I work in the housing industry and our analysts predict 5 years before the overbuilt areas and the foreclosures get sorted out. Not to mention mortgages will be harder to get. There will never be another housing boom.
The next shoe to fall will be commercial real estate. It could be as bad as the housing bust.

 

[harley]

BUD and DEO should be the leading indicators.

 

[clifp]

I just bought DEO today. I hope you are a right. I wonder if DEO provides free samples to its stockholders, I think I could use some.

 

[dex]

Business Cycle and Stock Performance

 

[Orchidflower]

Stock market turns first, then the economy and then housing. The end.
So far, from all my reading, it seems that the market is to turn in 2009, then the economy in 2010 and then housing in 2011. We can only see if the gurus have it right for once....

 

[mathjak107]

which goes up first, fastest & furthest, housing or stock market? how about which segment of each?

anything i dont own!

 

[Dawg52]

anything i dont own!

You should be receiving your Certified Born Loser's certificate any day now. I earned mine years ago.

 

[lazygood4nothinbum]

funny.

but do fundamentals ever kick back in and if so where would they set? for instance, if i was to look back 30-40 years on a property and appreciate the house by the typical few percentage points over average inflation during that period, does that establish some sense of "intrinsic" value or once the slaughter ends is fair price reset according to a new paradigm guided by the last foreclosure to sell?

having just heard some floor trader on tv speculate that the dow will bottom in the 6000s, i'd ask a similar question of that market. i hear tv talk now about revaluing assets. is that just another word for deflation?

 

[unclemick]

BUD and DEO should be the leading indicators.

BUD shareholders vote 11/12 on the merger - so you may have to take them off the table.

Now in the 73/74 meltdown I was sitting at the bar in Littleton CO listening to the Coors distributer tell me beer did well in recessions - when the beer dropped off and whisky picked up then the recession was over.

heh heh heh - Actually I have no clue.

 

[Gone4Good]

which goes up first, fastest & furthest, housing or stock market? how about which segment of each?

This time around . . . distressed bank debt.

 

[Gone4Good]

Stock market turns first, then the economy and then housing. The end.

This time around the cycle may be a bit different. Typically stocks will lead on both the way down and on the way back up. But this cycle didn't start like that. Housing peaked in 2006-2007, well before the stock market. The credit markets started to feel the hurt next. In fact, stocks didn't really crack until a week or two after the credit markets were in full meltdown mode. Stocks have not been a leading indicator at all.

Given that this is a credit driven down cycle, I suspect the credit markets need to move first.

Although I expect the housing market will need to stabilize before the rest of the market can recover, I wouldn't anticipate any major gains there. Stocks and bonds will likely dramatically outperform housing in the eventual recovery.