2 months ago • 1:39 min
A common narrative used to explain the fearsomeness of bear markets is that they’re a story told in two halves. The first sees a sharp valuation correction as markets start to anticipate tougher times ahead – that’s been 2022. The second is all about how tough those times actually get – that’ll be 2023.
And it’s an interesting narrative when you look at America’s smaller publicly traded companies. The chart shows the price-to-earnings (P/E) ratio for the S&P 600, an index of small-cap US firms. The ratio, commonly used to determine a stock’s valuation, is at levels seen only during the worst economic times, like the Covid crisis of March 2020 and the global financial crisis of 2008-09.
But there’s a plot twist: some major economic thinkers – Goldman Sachs is one of them – have recently s
Here’s why one of them is about to break away.
Sure, recessions are bad for the asset class, but this year could turn out to be good for them.
Tech profits are expected to fall more than they have since 2016.