USA100, Daily
The National Bureau of Economic Research (a private, non-government, non-partisan research organisation dating back to 1920) found that the US economy peak in February was perhaps the easiest call in the NBER’s history. The event-driven downturn clearly started with shutdowns on March 15, leaving declines for most of the March economic data. The research also suggested, controversially, that the US recession actually started in February.
The last expansion lasted a record 128 months, following a prior 120 month record for the 1990s expansion. The shortest recession in history was the 6-month downturn that ended in July of 1980, and this record will be broken too if the economy posts the expected record gains into Q3. Following Friday’s jobs report, assumptions are that the US economy turned the corner either in the last week of April or the first week of May, leaving April as the likely trough month that would mark a 2-month recession.
Economists will forever need to reference research results for studies on recessions with or without the “Great Lockdown,” as the out-sized drop and ensuing surge will bear little resemblance to other cycles, and the gyration will dominate regression results. The NBER perhaps should have considered a new category for lockdowns, which don’t share the demand dynamics of other recessions, and are more like a long hurricane than a short recession.
The USA100 traded north of 10,000 for the first time ever, USA500 breached 3,200 and the USA30 holds over 27,000 as sentiment holds ahead of the FED later today.
https://www.nber.org/cycles/june2020.html
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Stuart Cowell
Head Market Analyst
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