Is a recession really a cause for concern in the stock market?

  • Wall Street expects both recession and higher stock prices
  • Historically, the second year of a rally brings an average return above 11%
  • The S&P 500 has still notched a very decent 8.7% average gain in an above-average yield environment
  • During years when the president is up for re-election, the market tends to deliver higher returns
  • BMO Capital Markets Chief Investment Strategist projects S&P 500 earnings per share climbing more than 13% to $250 next year
  • Citi U.S. Equity Strategist believes S&P 500 earnings per share can keep chugging higher despite macro concerns
  • Deutsche Bank sets year-end 2024 S&P 500 target at 5100, suggesting a mild recession wouldn’t be much of a speed bump for stocks
  • Market gains during a recession have happened in the past, although they are rare

Wall Street is expecting both a recession and higher stock prices in the coming year. Historically, the second year of a rally brings an average return above 11%. Despite concerns about high yields, the S&P 500 has still performed well in above-average yield environments. During years when the president is up for re-election, the market tends to deliver higher returns. BMO Capital Markets Chief Investment Strategist projects S&P 500 earnings per share climbing more than 13% to $250 next year. Citi U.S. Equity Strategist believes S&P 500 earnings per share can keep growing despite macro concerns. Deutsche Bank sets a year-end 2024 S&P 500 target at 5100, suggesting a mild recession wouldn’t be much of a speed bump for stocks. While market gains during a recession are rare, they have happened in the past. However, it’s important to note that recessions can still have a negative impact on the market.

Factuality Level: 7
Factuality Justification: The article provides historical data and analysis to support the claim that the stock market tends to outperform during a presidential re-election year. It also includes projections and opinions from investment strategists. However, the article does not provide a comprehensive analysis of potential risks and uncertainties that could impact the market in 2024.
Noise Level: 3
Noise Justification: The article provides a mix of relevant information and speculative analysis. It discusses historical trends and projections for the stock market in 2024. However, it lacks scientific rigor and evidence to support its claims. The article also dives into unrelated territories by mentioning wars and geopolitical outlook, which are not directly related to the topic of the stock market. Overall, the article contains some noise and filler content.
Financial Relevance: Yes
Financial Markets Impacted: The article discusses the performance of the stock market and its potential outlook for 2024.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article primarily focuses on the financial markets and the potential performance of the stock market in the future. It does not mention any extreme events or their impacts.
Public Companies: BMO Capital Markets (), Citi (), Deutsche Bank ()
Key People: Brian Belski (BMO Capital Markets Chief Investment Strategist), Scott Chronert (Citi U.S. Equity Strategist)

Reported publicly: www.marketwatch.com