RECESSION ALERT: The FED Just Crashed The Stock Market – YouTube

RECESSION ALERT: The FED Just Crashed The Stock Market


  • Video Views: 413838
  • Published On: 2022-04-30 04:00:01
  • Video Published/Author: Graham Stephan
  • Video Duration: 00:12:25
  • Source: Watch on YouTube


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EXPLAINING THE DECLINING GDP:

One, MOST of the decline was due to a decrease in INVENTORY investment, which – was BOOMING in the final months of 2021. r.

TWO, the economy also saw a decline in spending across the state, federal, and local governments…which, was likely fueled by the decrease of unemployment insurance, child tax credits, and stimulus.

Third, EXPORTS declined by 3.2%…or, in other words…less of OUR OWN goods and services were shipped and sold overseas…which, could LIKLEY be the result of the ongoing Shutdown overseas, along with the international tension.

And Fourth, we also saw an 8.5% decline in DEFENSE SPENDING, which CNBC said, knocked a third of a percentage point off the final GDP.

In terms of how a recession could impact the stock market:

From 1869 to 2018…there have been a total of 16 recessions which had POSITIVE stock market returns….in fact, of those positive recessions…the market went UP an average of 9.8%, during a time the GDP declined by 3%…. or, in other words…out of 30 recessions…HALF had no correlation whatsoever with lower stock values.

To take that a step further, since 1869…one study found that the correlation between GDP growth and stock market returns was nearly ZERO – and, on average, the US stock market peaks SIX MONTHS before the start of a recession.

According to AWealthOfCommonSense Blog…throughout EVERY SINGLE RECESSION SINCE 1945…the stock market has – at SOME POINT – seen a sell off…with the average drawdown coming in at a whopping 29.2%…
https://marketsentiment.substack.com/p/recession-primer?s=r

HOWEVER…the GOOD NEWS is that, even though there CAN be a rather abrupt sell off…by the time the recession is OVER, the market actually RECOVERS, and has posted an average PROFIT of 1.7%…with, an average gain of 15.3% the following 1 year….meaning, INVESTING DURING A RECESSION is one of the most profitable times to invest. Not to mention, in the 3 years following every single recession we have ever had…the market was 100% in the green.

If anything, Bloomberg notes that a bear market tends to be a better predictor of a recession…rather than a recession being a predictor of a bear market.

Now, that’s not to say that prices can’t go lower, or that – a recession could last way longer than anticipated, or maybe this entire thing is a fluke false alarm…but, based on EVERY other recession in the past…the best course of action is to simply stay invested…and KEEP INVESTING when times are bad…especially if we do see an actual recession.

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35 comments
  1. I'm just hoping this doesn't last too long. I just got into the investment games and everything is deep in the negative. It appears I'm losing badly. I know things will get better but right now it just looks like I'm poorer than I was lol.

  2. question is whether investors have the cash to invest? Retail investors usually are all in during the euphoria of a bull run which precedes a recession. I think this time around the question is how higher rates are gonna go up and whether the FED will have the ability to cut back rates again to stimulate the economy. Additionally, the supply situation should improve soon and when it does stimulating the economy will become critical else there will be a price war from A to Z.

  3. With the high rate of inflation, the economy is heading towards a severe recession. I overheard someone talking about how a couple grew their reserve from $350k to almost $700k during this Red season, Can you share tips on how to make such aggressive proceeds in short periods?

  4. Inflation is rising faster than wages . We’re a consumer based economy. People need to buy goods to keep the economy functioning…. So with that in mind and the cost of living skyrocketing I can’t imagine people feel good about anything.

  5. All of the rich are wanting to buy, but nobody wants to sell. The FED is trying soo hard to get people to sell, & they're still soo hungry to collect as much debt as possible! It's already crashed, but everyone will be told, it's ok!

  6. Let us put "inflation" fully in perspective here. It hasn't been just someone's costs being passed on down the line, in this environment it has been someone's excessive profits being passed as costs to then next in line and then passed down with varying degrees of excess profit in turn. Companies making record profits (it's public information in their earnings calls) are obviously not merely passing on higher costs, they are the direct cause of those higher costs for everyone else.

  7. So basically investing in the middle of recession could be good, but how about in the middle of inflation… It pretty much looks like stagflation, inflation because of war and supply chain issue and recession because of inflation and geting down inflation is going to take lot more than increasing fed rates, could it be that we are at peak of evolution and something unexpected is going to happen! (May be Thanos is on his way!)

  8. We've been in a recession since the states national debt went into the negative zone sir. When your personal bank account shows up negative? Do you ask yourself if, maybe, perhaps you're broke? No. You know you are broke already.

  9. When it comes to investment, diversification is key. That is why I have my interests set on key sectors based on performance and projected growth. They range from the EV sector, renewable energy, Tech and Health.

  10. ..Nobody knows if stocks go up or down in the short term, but we can be pretty sure that most are up in the long term 5+ years.

    Amazon stock:

    ,.Amazon's core areas earn billions in profit:

    Amazon has the most efficient retail operations/logistics. Can you imagine how much other ecommerce must be hurting because they're not as efficient as Amazon… and when they go out of business, that means more customers for the surviving company Amazon.

    Amazon could eat the cost (subsidized by other line of businesses) but it doesn't because Amazon Prime is raised from $119 to $139 and the stickiness of renewal is 98%.

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