US Recession Confirmed, S&P 500 Opens Down 2% and Bitcoin Follows
The Bureau of Economic Analysis (BEA) confirmed what economists had long suspected: the United States entered a technical recession in the second quarter of 2022.
The Bureau of Economic Analysis said on Thursday that the economy declined by 0.6% in the second quarter of 2022, after a decline of 1.6% in the first quarter.
The S&P 500, which gauges and monitors the stock performance of the 500 largest publicly traded firms in the United States, declined by 2.58% in response to the news.
Bitcoin did somewhat better, incurring a decline of 2.08 during the same time period, which sent the digital currency back under the $19,000 resistance line.
During a tumultuous week for global markets, the ultimate confirmation that the United States had already entered a technical recession provided little solace or cause for hope.
Seema Shah, Chief Global Strategist at Principal Global Investors, was not willing to sugarcoat the reality when she appeared on Bloomberg. When asked whether there was more suffering to come, Shah said affirmatively.
“Certainly. “I believe that [Q3] was rather more reasonable,” remarked Shah. “In July and August, the market was fueled by a near-ridiculous amount of confidence, with the expectation that the Fed and central banks would bow to sluggish growth, and then the understanding that there is only one focus in town: inflation. It has reset all expectations to higher interest rates, limited growth, and, of course, fewer profits, and it is dragging the market down, and it is not finished yet.”