August 3, 2020

CNBC: Why are we in a recession if the stock market is recovering?

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https://www.cnbc.com/2020/06/11/why-are-we-in-a-recession-if-the-stock-market-is-recovering.html

Why are we in a recession if the stock market is recovering?

2020-06-11 00:00:00, Megan Leonhardt, CNBC

Content Categorization
/Business & Industrial
/Finance
/News/Business News/Financial Markets News

Word Count:
774

Words/Sentence:
23

Reading Time:
5.16 min

Reading Quality:
Intermediate

Readability:
11th or 12th

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"Typically the market will start declining before a recession is visible and it will start recovering about four months before the end of a recession," Jurrien Timmer, director of global macro at Fidelity Investments, tells CNBC Make It.

So if we're in a recession, aka an economic downturn, why is the stock market spiking?

In fact, the stock market has a decent track record of "sniffing out" when the economic situation has stopped getting worse, says Liz Ann Sonders, Schwab's chief investment strategist.

In this case, Sonders says she believes the recent stock market rallies have more to do with the hope by investors that the U.S. will undergo a "V-shaped" recovery where the country's GDP takes a sharp and rapid downturn followed by a violent upswing.

The stock market tends to be what's referred to as a leading indicator of the economy.

Keywords
Stock markets, Markets, Personal finance, Recessions and depressions, United States, S&P 500 Index

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