When Bear Markets End
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The Turnaround of July 1982
In the spring of 1982:
The U.S. economy was contracting
The stock market was down
Oil prices were very high
Consumer morale was poor
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The Turnaround of July 1982
By the summer of 1982:
Inflation had declined to single digits
Inflation was down from 14%+ in March of 1980
The Fed had cut rates for nearly a year
The target rate was 9.5%
This is down from a historic high 19% in June 1981
The Index of Leading Indicators had begun to climb
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S&P 500 Went on a Tear
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The Turnaround of July 2009
By the summer of 2009:
The Index of Leading Indicators had begun to climb
June 2009 was the third consecutive monthly rise
The annualized rate of increase was 12.8%
6 of 7 recessions since 1960 ended with 12% gains
If over, this 22-month recession is the longest since
The Great Depression
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Leading Indicators Signaling the Recession’s End
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S&P 500 on a Tear Again – 03/09/09 to 07/24/09
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Goodbye Bear!
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Sources: Source: FactSet and Morningstar Encorr, Fidelity Investments, Institute of Supply Management, New York Times