Earnings Recession

There’s been a sell-off in many US Markets. In US Growth Stocks, the NASDAQ is down The first phase of the sell off in US Markets 30% Year to Date. US Large Cap Stocks as gauged by the S&P 500 index are down 20%. That’s technically a “Bear Market,” and it started long enough ago- almost half a year at this point- that most of you are likely aware. This has been driven by “macroeconomic” factors that speak to investors concerns for the US economy at large (namely, inflation concerns). This has recently taken a turn.

We discuss the fact that from our perspective, we’ve entered “phase 2” of the current market cycle. This phase is called the “earnings recession” phase, where companies are making less money. That marks a shift from macro-concerns to fundamentals based concerns. As we note, this also may mark a shift away from fears of “what might be” to “what is.” This phase of a sell off can be notably more uncomfortable for investors and can last much longer, which is why we felt the need to discuss.