How does this decline compare to previous recessionary ones?

[Lsbcal]

I don't have any actions planned just because of the big inversion in the yield curve. But here is a long term chart. Hasn't been this deeply inverted since before the recessions in 1974 and 1980. There is a long history of inversions preceding recessions but timing it can be tricky.

Chart shows the 10year Treasury minus the 3month Treasury:

 

[audreyh1]

Yep, same with 10 yr minus 2 year.

 

[Lsbcal]

Interesting view of how credit availability can slow growth, thanks.

The markets are already adjusting to tightening credit conditions as being a further factor (along with rate hikes) to slow the economy. Do we get a recession out of this and how bad if so? Lots of questions with plenty of guesses at answers.

I just follow trends which can be frustrating at times as trends can change in varying time frames. Prices reflect all the bets.

 

[Lsbcal]

Last week felt really good.
I am getting more optimistic. Bad sign?


UPDATE:

Where is the elusive recession?

 

[Montecfo]

Last week felt really good.
I am getting more optimistic. Bad sign?


UPDATE:

Where is the elusive recession?

It does look interesting. But I do think recession is coming and signs pointing there. Which suggests to me stocks may have another leg down once that is in view.

I can also envision the Fed beginning to cut, not allowing recession heading into an election year, delaying a new bottom .

 

[audreyh1]

Last week felt really good.
I am getting more optimistic. Bad sign?

Where is the elusive recession?

Yeah, it’s a bad sign, LOL.

When is the recession? I’m curious to see. This is not playing out like many people expected.

Doesn’t matter to me much investment wise. I expect there to be occasional recessions and don’t try to forecast when.

 

[Koolau]

Yeah, it’s a bad sign, LOL.

When is the recession? I’m curious to see. This is not playing out like many people expected.

Doesn’t matter to me much investment wise. I expect there to be occasional recessions and don’t try to forecast when.

The yield curve suggests several months now to the next recession. I too have no major plans to change anything. I've been through all this before - a few times.

 

[jurgs01]

Look at the stock market well into previous recessions. Not always straight down...

 

[Koolau]

Look at the stock market well into previous recessions. Not always straight down...

Hey, when you're right, your right!

 

[captain3d]

Most of the market is down. Just the top few companies holding it all up. I think it is precarious.

 

[DrRoy]

We do have a series of higher lows and higher highs. That is a good sign, until it isn't.

 

[Koolau]

We do have a series of higher lows and higher highs. That is a good sign, until it isn't.

Heh, heh, please let us know when it isn't.

 

[FREE866]

Most of the market is down. Just the top few companies holding it all up. I think it is precarious.

This is the latest glass half empty narrative gaining traction in the media to keep investors on edge. Says a lot about sentiment--which is a bullish sign for sure. When market is climbing it is ALWAYS accompanied by worrisome headlines.

 

[Markola]

1980 trend line here we come?

 

[Montecfo]

Let's see: very narrow breadth. Inverted yield curve. Retailers reporting disappointing results mixed jobs report, hourly earnings rose less than expected, hours worked declined, unemployment rose.

Wage growth continuing to moderate is a good sign for interest rates. It does seem like a very good time for a Fed pause. Soft landing narrative I think depends on it.

 

[Koolau]

Let's see: very narrow breadth. Inverted yield curve. Retailers reporting disappointing results mixed jobs report, hourly earnings rose less than expected, hours worked declined, unemployment rose.

Wage growth continuing to moderate is a good sign for interest rates. It does seem like a very good time for a Fed pause. Soft landing narrative I think depends on it.

I'd settle for a bumpy landing - as opposed to a crash landing. I'm no expert, but it just "feels" like the R word is coming. Would love to be wrong (heh, heh, again.)

 

[Humbooster]

All I know is, there is ~ 200K less now than I had in December of 2021 in my retirement account, should have blown the money when I had almost had it. Have not changes allocations or contributed anything during that time.

 

[Koolau]

All I know is, there is ~ 200K less now than I had in December of 2021 in my retirement account, should have blown the money when I had almost had it. Have not changes allocations or contributed anything during that time.

Yeah, but if you pulled $200K out and blown it, you'd be in even worse shape now! AND, it will all almost certainly come back in some time period. Unless you have a terminal diagnosis, just waiting out the ups and downs is usually the best plan - unless you actually want to change your AA. If your AA is out of whack, there's likely no reason you shouldn't rebalance now...Of course, I don't know your situation, so YMMV.

 

[GravitySucks]

All I know is, there is ~ 200K less now than I had in December of 2021 in my retirement account, should have blown the money when I had almost had it. Have not changes allocations or contributed anything during that time.

How’s it look compared to December ‘18?

 

[Koolau]

How’s it look compared to December ‘18?

Now THAT's a good way to look at it. I'm way ahead, even though I'm down from my highs. The market gives and the market takes away. You can't win if you don't play the game. YMMV

 

[Al18]

Humbooster,
Since you are retired, you SHOULD be spending some from your retirement accounts each year. That’s what it’s for.

 

[ncbill]

Now THAT's a good way to look at it. I'm way ahead, even though I'm down from my highs. The market gives and the market takes away. You can't win if you don't play the game. YMMV

I restructured my portfolio, selling everything to simplify & not re-investing until the fall of 2020, and I'm still up from there.

 

[Lsbcal]

This might be my last updated chart for the 2022 bear market. Looks like we can welcome a new bull market. At some point you have to call a bull a bull.
UPDATE:

 

[cat4ever]

inflation adjusted?

Would like to see these charts inflation adjusted. (Please magical internet, do the work for me now).
But main point is, are we really out of the bear if everything costs say 20% (totally made up number) more than when this bear market started?

 

[Gumby]

Would like to see these charts inflation adjusted. (Please magical interment, do the work for me now).
But main point is, are we really out of the bear if everything costs say 20% (totally made up number) more than when this bear market started?

The definitions of bear/bull markets are unrelated to inflation.

Bull Market
A time when stock prices are rising and market sentiment is optimistic. Generally, a bull market occurs when there is a rise of 20% or more in a broad market index over at least a two-month period.

https://www.investor.gov/introduction-investing/investing-basics/glossary/bull-market

Bear Market
A time when stock prices are declining and market sentiment is pessimistic. Generally, a bear market occurs when a broad market index falls by 20% or more over at least a two-month period.

https://www.investor.gov/introduction-investing/investing-basics/glossary/bear-market