Opinion: This Is the 1 Thing That Can Send the U.S. Economy Into a Recession and Stocks Into a Bear Market
Since this decade began, Wall Street's major stock indexes -- the ageless Dow Jones Industrial Average (DJINDICES: ^DJI), benchmark S 500 (SNPINDEX: ^GSPC), and innovation-driven Nasdaq Composite (NASDAQINDEX: ^IXIC) -- have vacillated between bull and bear markets. With all three indexes well off of their 2022 bear market lows, it would appear the needle is pointing higher on Wall Street... but looks can be deceiving.
At the moment, there is no shortage of economic datapoints and predictive indicators that suggest trouble is brewing for the U.S. economy. The first meaningful decline in U.S. money supply since the Great Depression, a 17-month drop in the Conference Board's Leading Economic Index, and only the fourth notable decline in commercial bank credit dating back 50 years, are all potential signals that economic activity is poised to slow.
Since corporate earnings tend to ebb and flow with the health of the U.S. economy, recessions typically coincide with poor performance for the Dow Jones, S 500, and Nasdaq Composite. Approximately two-thirds of the S&P 500's drawdowns since 1929 have occurred during, not prior to, a recession.
Source Fool.com
