Data Breakdown, Shallow Recession Talk & Investor Psychology
Money Wise is back with another informative episode covering Fed-Speak, the possibility of a shallow recession, and more! Last week, the Dow was down 0.1%, the S&P 500 was down 0.4%, and the NASDAQ was down 1.3%. YTD the year is still looking positive, with the Dow up 2.5%, the S&P 500 up 4.9%, and the NASDAQ up 5.1%. Lots of data came out last week, including Consumer Price Index and Producer Price Index numbers, and this is what drove the market. The hotter than expected Consumer numbers led to the worst day in almost a year for the Dow. The market made somewhat of a recovery in the days following, but we did have the first negative week in quite awhile. Still, it wasn’t a dastardly bad week, and we ended down just slightly. The Fed-speak was resoundingly saying ‘no interest rate cuts anytime soon’ so that narrative may be dead. We may see cuts in late Spring or early Summer, but the Fed wants to avoid a recession situation like we had in the ‘80s when rate cuts came too soon and inflation rose again. The Money Wise guys discuss why we are likely to see a recession in 2024, but we still have a strong job picture, lots of cash on the sidelines, and higher wages, so investors can likely expect a shallow recession.
What is a Shallow Recession?
Since the Money Wise guys mention that we shouldn’t be surprised about a shallow recession in 2024, let’s look more closely at what that means. A shallow recession happens when some parts of the economy are performing on average, while others are struggling. A shallow recession can be viewed as more of a bump in the road than a pothole that disrupts the economy. Learn more about each type of recession, including a shallow recession, here.
In the second hour today, the Money Wise guys discuss Investor Psychology. You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at davidsoncap.com, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.
