Trade the QQQ
Make money trading calls and puts on the QQQ
How often does a correction in the stock market turn into a full-blown recession?
01 Apr
Posted by: admin in: Other - Business & Finance
Matt Humberto asked:
I’m interested in “leveraged indexes” (ex., SSO) that imitate the general movement of the stock market with increased power. However, if the market plummets, I’m twice as in trouble as I’d normally be.
I’m interested in “leveraged indexes” (ex., SSO) that imitate the general movement of the stock market with increased power. However, if the market plummets, I’m twice as in trouble as I’d normally be.
I know that predicting the market is a difficult if not impossible task, but are there any early “warning signs” to warn me of an upcoming recession?
Historically, how many times have corrections (10% drop in the market) turned into a true, full-blown recession (20% drop or more in the market)?
Thanks for your help!
play poker online
Search
Categories
- Current Events (2)
- Economics (9)
- Elections (1)
- Homework Help (1)
- Investing (68)
- Other - Business & Finance (6)
- Other - Education (1)
- Personal Finance (2)
- Politics (5)
- Polls & Surveys (1)
- Software (1)
- Special Education (1)
- Uncategorized (2)
- United States (2)
One Response
Michael K
03|Apr|2009 1wine making equipment
Stock market fluctuations and economic recessions are two entirely different animals, and a market decline doesn’t ‘turn into’ a recession, though it may anticipate an economic recession. There is a weak correlation between economic recession and (past) market returns, but the correlation to interest rates is stronger. One reason for this is that some industries are quite sensitive to interest rates, such as home building, and higher rates reduce demand for new houses; we’re seeing that effect now. If the Fed reduces rates later this year, home building will almost certainly pick up again. High interest rates also affect the demand for financed consumer goods, such as automobiles, and for capital expenditures. If you want a good leading indicator for the market, watch the Fed.
Leave a reply