What Could Happen to Tech Stocks in a Recession?
Recessions tend to be bad news for stocks. After all, stocks get their value from their future cash flows, and in a recession, estimates for future cash flows get dialed down significantly for most companies.
A recession is generally defined as two straight quarters of negative growth, but the real determination is made by the National Bureau of Economic Research (NBER), which defines a recession as "a significant decline in economic activity that is spread across the economy and lasts more than a few months."
While recessions have a negative impact on most industries, they're particularly harmful to cyclical industries where consumers cut back in tough times. One of those industries is the tech sector.
Source Fool.com
