Curious about what's happening in the stock market? Every month, the alooola® team summarizes the key takeaways in a quick, easy-to-understand article!
What Do I Need to Know? Recession to Recovery
•A recent survey of economists has the probability of a recession in the next 12 months at 63%, up from 49% in July. •The average U.S. recession since 1947 has seen stocks fall around 30%. •Yet, sometimes bad news is good news. •At its lowest point, the stock market has dropped over 26%. Since 1950 the stock market has dropped 25% or more 9 times... •All except 1 of those times resulted in positive returns 1 year later with an average return of 22%.
America the Strong
•The U.S. dollar is up 15% this year against the euro, 20% on the British pound, and 25% on the yen. •This has created a huge problem since 25% of S&P 500 companies' revenues come from abroad (i.e. a strong dollar hurts their revenue received from abroad). •Europe, in particular, is a concern for investors as it continues to struggle with the war in Ukraine and high energy prices. •Within the S&P 500 Booking Holdings, Estee Lauder, and Cooper Cosmetics have the highest exposure to Europe, with over 40% of their revenue derived from the region.
Cocktail Party Facts
•Historically, during recessions, the stocks of discount retailers tend to outperform the rest of the stock market. •For example, discount retailers such as T.J. Maxx, Dollar Tree, and Ross had an average return of above 20% in a recession compared to the overall market, which falls around -30%.
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Disclosure: alooola® is a branded investment advisory service provided by Glen Eagle Advisors, LLC, an SEC Registered Investment Adviser. The Glen Eagle Advisors brochure provides an explanation of the service and its fee structure. Material presented is for informational purposes only, and is not meant to be advice to any individual. Talk with alooola® to see how this information may apply to you. Consider your current financial situation, tolerance for risk, and investment objectives before you invest funds in securities through alooola®. For a more complete explanation of the alooola® service, please visit www.alooola.com. This email includes factual data based on articles published by Reuters, Wall Street Journal, Barrons Magazine, Apollo Chief Economist Research, BofA Global Research, MFS Research "By the Numbers", and Bloomberg.