Global Courant 2023-04-18 05:45:37
Wall Street may be tearing a page from the post-WWII era.
According to Lori Calvasina of RBC Capital Markets, the stock may be ignoring all signs of a recession.
“If you go all the way back to 1945, which was the recession that came out of World War II, the stock market just marched through it,” the company’s head of U.S. equity strategy told CNBC’s “Fast Money” on Monday. “It’s the only recession where it’s been essentially ignored.”
In a research note published this week, Calvasina addresses the performance of the S&P 500 during recessions dating back to 1937. She found that the 1945 recession was the only one without a market pullback.
RBC US Equity Strategy, Haver
She cited the similarity between government war funding in 1945 and massive Covid relief in 2020 and the Fed’s rate hikes as some examples.
“I actually found some interesting terms that were similar. It was described as a technical recession, driven only by the fact that the war economy stopped and we flipped to a peacetime economy,” Calvasina said. “(This) idea of a manufactured recession that we all talked about last year, you kind of had it back then.”
However, she also acknowledged that there are differences between the two time periods and noted that she does not believe in the bull case.
“I actually think we priced in a recession at the October lows, but I think people are tired of hearing that,” Calvasina noted.
Her S&P 500 the price target for the end of the year is 4,100. She revised her S&P EPS forecast from $199 to $200 last week. The S&P closed today at 4,135.32 and is up more than eight percent since the start of the year.
