Recession and the Stock Market

Dick Young writes in the most recent issue of Richard C. Young’s Intelligence Report:

If you have been with me for a while, you’ve read two of my most recent issues—Embrace Russia, Ditch the Saudis and Turks and Crack! You’re in Your Tomb (about the real threat of an EMP attack knocking out America’s power grid). Well, there is more, much more, to be concerned about. Young Research subscribes to a $50,000/year European database that allows us to gauge the turning points in the economic and monetary cycles that underpin the financial markets. Many months ago, I concluded that the American economy has already entered the winter of the economic cycle. In fact, as chart #11 in my Economic Analysis supplement indicates, the industrial production sector of the economy has most probably already entered a condition of mini-recession, at the least. And what does recession mean for the stock market?

Every recession is accompanied by a crack in the stock market. And what has been going on in the first seven weeks of 2016? The sharp decline in the stock market understates risk, as indicated by my displays.

Dow Bank Stocks Slaughtered

Serious dry rot has settled in, which is odd in a presidential election year. But the preceding is far from the worst news. In only a matter of weeks, to date, three financial stocks in the Dow—American Express, Goldman, and JP Morgan—are down 20%, 20%, and 15% respectively. How many billions of market cap have been flushed as you were just catching your breath for this election year?

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E.J. Smith - Your Survival Guy

Preparing your investments and family for when disaster strikes.

E.J. Smith is the Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention. E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com. Sign up here to receive all the best content from Richardcyoung.com each week.