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47. The Recipe for a Market Sell-Off: Carry Trade, SAHM Rule, Recession Fear
Manage episode 433307885 series 3478584
The stock market has been having quite the week since our last episode on the Fed’s decision to NOT do a rate cut and the resulting effects of the not-so-great unemployment numbers that came out last Friday.
Recipe for disaster?
Is the stock market crashing? Why was there a sell-off and what is a market sell-off? And is this a good time for us self-directed investors to invest more, like, is the stock market on sale?
What were the sell-off ingredients?
- The Carry Trade (Yen Got Stronger)
- The Sahm Rule (Recession Indicators)
- Recession FEAR (Emotional Investors)
Sell-Off Decline: Pull-Back, Correction, Bear Market?
We all know that the stock market recently tanked and there was a huge sell-off. Was this a pull back or a correction, are we in a bear market.
The difference is a decline of:
Pull back = 5-9%
Correction = 10 -19% (Stock Market Is Currently Here)
Bear market = >20%
✨The recent turbulence was the most severe since the 34% decline that occurred in Q1 2020.
✨ Market corrections happen almost every year. Since the early 1980s, there's been a greater than 5% drawdown in the S&P 500 Index in every year but two (1995 and 2017).
✨ The stock market has historically recovered quickly from corrections. The average time to recovery from a 5%-10% downturn is three months. The average time to recovery from a 10%-20% correction is eight months.
✨80% of corrections since 1974 have not led to a bear market.
✨ There's a 73% probability of a double rate cute (.50%)
How do we know we are in a recession?
Great Analogy: https://www.tiktok.com/t/ZTNgX6jUW/
Related Episodes:
Ep. 46) Fed Update: What is Event Risk? Could it Trigger a Sell-Off?
Ep. 45) What is Market Breadth & Concentration Risk? Why Should YOU Care?
Ep 18): Understand the Yield Curve, Treasury Bonds, and Stock Market Impacts
Ep. 15) Are we in a recession? What and who defines a recession?
Ep. 14) What’s going on with Inflation?
Still Have More Questions or a Comment?
🙋🏾♀️🙋🏻🙋🏼♀️🙋🏽♂️🙋Holla @ us on:
Get Your Free eBook: The Stock Market Explained
All Our Links
Email Us jessica@marketmakeherpodcast.com
Instagram @marketmakeherpodcast
TikTok @marketmakeher
X/Twitter @MarketMakeHer
Join the Money Coven FB Community
👀 Watch us in action on our YouTube Channel 👀
About Us 🌚🌞
Market MakeHer is an investing education podcast taught by a 15-year finance expert to her friend who is a beginner investor. Our mission is to demystify the stock market and make financial literacy accessible to all self-directed investors! We believe that investing is for everyone and that's why we break down complex investing topics (from "Her" perspective), show you free tools/resources on our podcast, and offer a ton of free educational content on our website!
Important Disclosures:
Market MakeHer podcast is unsponsored at the time of recording. Tools and resources mentioned are for informational and educational purposes only. Remember, investing involves risk, and there's always a potential for losses when investing in securities.
Market MakeHer LLC provides educational content and resources, but we are not registered financial advisors and do not provide personalized investment advice. Consult with a licensed financial advisor before making any investment decisions.
--- Support this podcast: https://podcasters.spotify.com/pod/show/market-makeher/support52 επεισόδια
Manage episode 433307885 series 3478584
The stock market has been having quite the week since our last episode on the Fed’s decision to NOT do a rate cut and the resulting effects of the not-so-great unemployment numbers that came out last Friday.
Recipe for disaster?
Is the stock market crashing? Why was there a sell-off and what is a market sell-off? And is this a good time for us self-directed investors to invest more, like, is the stock market on sale?
What were the sell-off ingredients?
- The Carry Trade (Yen Got Stronger)
- The Sahm Rule (Recession Indicators)
- Recession FEAR (Emotional Investors)
Sell-Off Decline: Pull-Back, Correction, Bear Market?
We all know that the stock market recently tanked and there was a huge sell-off. Was this a pull back or a correction, are we in a bear market.
The difference is a decline of:
Pull back = 5-9%
Correction = 10 -19% (Stock Market Is Currently Here)
Bear market = >20%
✨The recent turbulence was the most severe since the 34% decline that occurred in Q1 2020.
✨ Market corrections happen almost every year. Since the early 1980s, there's been a greater than 5% drawdown in the S&P 500 Index in every year but two (1995 and 2017).
✨ The stock market has historically recovered quickly from corrections. The average time to recovery from a 5%-10% downturn is three months. The average time to recovery from a 10%-20% correction is eight months.
✨80% of corrections since 1974 have not led to a bear market.
✨ There's a 73% probability of a double rate cute (.50%)
How do we know we are in a recession?
Great Analogy: https://www.tiktok.com/t/ZTNgX6jUW/
Related Episodes:
Ep. 46) Fed Update: What is Event Risk? Could it Trigger a Sell-Off?
Ep. 45) What is Market Breadth & Concentration Risk? Why Should YOU Care?
Ep 18): Understand the Yield Curve, Treasury Bonds, and Stock Market Impacts
Ep. 15) Are we in a recession? What and who defines a recession?
Ep. 14) What’s going on with Inflation?
Still Have More Questions or a Comment?
🙋🏾♀️🙋🏻🙋🏼♀️🙋🏽♂️🙋Holla @ us on:
Get Your Free eBook: The Stock Market Explained
All Our Links
Email Us jessica@marketmakeherpodcast.com
Instagram @marketmakeherpodcast
TikTok @marketmakeher
X/Twitter @MarketMakeHer
Join the Money Coven FB Community
👀 Watch us in action on our YouTube Channel 👀
About Us 🌚🌞
Market MakeHer is an investing education podcast taught by a 15-year finance expert to her friend who is a beginner investor. Our mission is to demystify the stock market and make financial literacy accessible to all self-directed investors! We believe that investing is for everyone and that's why we break down complex investing topics (from "Her" perspective), show you free tools/resources on our podcast, and offer a ton of free educational content on our website!
Important Disclosures:
Market MakeHer podcast is unsponsored at the time of recording. Tools and resources mentioned are for informational and educational purposes only. Remember, investing involves risk, and there's always a potential for losses when investing in securities.
Market MakeHer LLC provides educational content and resources, but we are not registered financial advisors and do not provide personalized investment advice. Consult with a licensed financial advisor before making any investment decisions.
--- Support this podcast: https://podcasters.spotify.com/pod/show/market-makeher/support52 επεισόδια
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