This Recession Indicator Has Been Foolproof for 70 Years: Here's What It Says Happens Next
Over long periods, Wall Street is a money machine that's handily outperformed the average annual returns of commodities like oil and gold, bonds, and bank certificates of deposit. But on a year-to-year basis, the stock market can be somewhat of a crapshoot, as investors found out last year.
When the curtain closed on 2022, the iconic Dow Jones Industrial Average (DJINDICES: ^DJI), benchmark S&P 500 (SNPINDEX: ^GSPC), and technology-dependent Nasdaq Composite (NASDAQINDEX: ^IXIC) all entered respective bear markets and produced their worst returns since 2008. The abysmal performance of these core stock indexes has a lot of investors asking whether a U.S. recession is unavoidable.
Unfortunately, there is no crystal ball that allows us to look into the future and know with concrete certainty whether a recession is coming. However, there is a somewhat off-the-radar indicator that's correctly forecasted U.S. recessions -- without fail -- over the past 70 years. Based on historic data, it's quite clear what happens next.
Source Fool.com
