Originally posted on April 3, 2020
We are dedicated to keeping you apprised of the current economic conditions. We will be sending periodic communications in April to help you make some sense of the ever-changing economic climate.
We believe we are in the very early stages of a severe recession. Consumer confidence hasn’t been this low since the crash of 2008. We have just experienced the sharpest economic downturn since WWII. The pending GDP numbers have the possibility of being the biggest draw down since the Great Depression. In the past two weeks, there have been 10 million jobs lost. The New York and Philly Fed manufacturing indexes have plummeted to all-time-record lows. Worldwide demand for crude oil hasn’t been this soft since 1982.
These days there are a lot of sources providing varying opinions, but we will leave you with some stock market facts for you to consider:
– History has shown us that on average it has taken 136 days from a market high to the point of entering in a bear market (20% decline). For this current cycle, it has taken only 19 days to enter in a bear market (the quickest bear market decline in history).
– The shortest duration for recessionary bear market has been 3 months – the next shortest cycle has been 14 months.
– 11 months is the average cycle time to begin seeing some growth after entering a recession.
As always, we at Kapusta Financial are here to guide you financially through these difficult times. If you have questions or concerns you would like to discuss, please feel free to email or call us at any time.