At least markets do not think so right now. In fact, the S&P500 does not price in a recession. Taking the average drawdowns in recessionary periods from previous all-time highs over the last five decades, the S&P500 would still need to decline by another 15%–20% to comply with precedents.
Recently, the S&P500 briefly touched bear market territory, having plunged more than 20% from its previous peak before reversing course later in the session. As main Western equity market indices saw another week of sustained declines, some market pundits see themselves vindicated in their earlier prediction of a bear market.
On the real economy side, recession fears have reached frenetic levels as financial conditions tightened further. Is the case for a soft landing finally off the table?
