Recession Predictions Fade

With Thanksgiving here we all have a lot to be thankful for. For investors, one reason to be thankful is the fact that the stock market hit another all-time high today. As recently as August many in the financial media were predicting that the U.S. economy was headed into a recession. The stock market had declined over 6% in early August there were forecasts for the declines to accelerate. In a video update we posted in late August we pointed out how we believed that the economy was not entering into a recession and that the U.S. consumer had rarely been in better shape.

Recently we have seen improving economic data, including U.S. third quarter GDP. From Reuters:

U.S. economic growth picked up slightly in the third quarter, rather than slowing as initially reported, and there are signs the downturn in business investment may be drawing to a close.

The upswing in the data would appear to validate the optimistic tone struck earlier this week by Federal Reserve Chair Jerome Powell, who said “at this point in the long expansion, I see the glass as much more than half full.”

Investors who exited stocks in anticipation of a recession have missed out on a nice rally that has taken stocks to all-time highs. This Thanksgiving we can be thankful that calls for a recession have all but vanished.

Happy Thanksgiving!