9 Minute Read

Tackle Today: The Tug-of-War

August 19, 2022

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«One of these two unprecedented things will happen.»


Consider these two facts.

First, we’ve never fought inflation readings as high as those seen this year without pushing the economy into a recession.

Second, the stock market has reclaimed 50% of the bear market losses. Stocks have never moved back to new lows after this happened.

Both facts stand at odds with each other.

The first suggests more economic pain before the war with inflation is won. And that would likely lead to the bear market’s return and a push to new lows for the stock market.

The second suggests the low is in, and we won’t retrace all of the gains regardless of what ill economic winds blow our way. I suppose we could thread the needle by seeing an actual recession arrive without the stock market taking out the June lows.

Time will tell, but I find the battle between both facts utterly fascinating.

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