Bloomberg Intelligence's 'Equity Market Minute' 10/21/2019

Gina Martin Adams from Bloomberg Intelligence discusses the potential impact of recessions on U.S. stocks, highlighting that historical evidence shows recessions don't have to be catastrophic. The analysis includes market corrections in the S&P 500 since the 1920s, showing that downdrafts during bull markets are less severe than during bear markets. The discussion also covers valuation evidence, indicating that investors are already positioned for significant risk, with the equity risk premium at a high level. Historical data suggests positive returns following such conditions, implying that recession risks are already factored into equity prices.

What is the main concern of investors discussed in the introduction?

• Currency fluctuations

• Interest rate hikes

• Recession fears

• Inflation rates

How do downdrafts during bull markets compare to those during bear markets?

• They are about the same

• They are non-existent

• They are half as severe

• They are twice as severe

What year is suggested as the start of a secular bull market?

• 2000

• 2005

• 2009

• 2015

What is the current equity risk premium mentioned in the discussion?

• 440 basis points

• 340 basis points

• 240 basis points

• 540 basis points

What is the average return in the 12 months following similar historical experiences?

• 8% positive

• 12% positive

• 5% positive

• 15% positive