Views From the Floor: Bear market now, recession looming?

Man Group

Research

5 Pages

Man Institute uses a mid 2022 issue of Views From the Floor to ask whether a bear market in equities must be followed by recession. The authors review post war history showing several bear markets that did not coincide with downturns, while most Federal Reserve tightening cycles eventually did. They then assess how broad the current equity selloff is and what that breadth says about risk ahead.

Date published: May 24, 2022

Key Takeaways

Bear market context: Distinguishes between equity drawdowns that occur without recessions and those tied to deeper economic stress.
Tightening cycles: Highlights that many historical rate hiking campaigns have ended in recession, though not all do.
Breadth of damage: Notes that widespread declines across many stocks can signal limited places to hide and rising macro vulnerability.

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