Stock market signals on recession may be wrong: UBS
Reuters – Thu, 1 Sep, 2011NEW YORK (Reuters) - The stock market has a poor record of predicting U.S. recessions and is likely sending false signals again, according UBS strategists, who expect the S&P 500 index to post double-digit gains by the end of 2011.
Excluding the current downturn, the S&P 500 has shed more than 17 percent 14 times since the end of World War Two, but the economy only fell into recession on nine of those occasions, equity strategists of the Swiss bank wrote in a research note published Thursday.
"Put differently, the market predicted roughly a third more recessions than actually occurred," they wrote in the report, entitled "14 of the last 9."
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