Bear markets and recessions

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Some history of bear markets and recessions from Goldman.

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A recession is not inevitable, but clients constantly ask what to expect from equities in the event of a recession. Our economists estimate a 35% probability that the US economy will enter a recession during the next two years and believe the yield curve is pricing a similar likelihood of a contraction. Rotations within the US equity market indicate that investors are pricing elevated odds of a downturn compared with the strength of recent economic data. Additionally, the dividend futures market implies S&P 500 dividends will decline by nearly 5% in 2023. During the last 60 years, S&P 500 dividends have not declined outside of a recession.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.