Stock Market Movements Will Determine If The Recession Is A Short Or Long Term One

The stock market has become especially volatile in the past month, with many concerned for the long-term repercussions that it might have. Various big names in the market have been bleeding money over the last week, with the NASDAQ losing as much as 3% in a single week.

With how the stock market is moving forward, it is becoming obvious that the US is moving toward a recession. However, depending on how it moves forward, will depend on long or short the recession could be. So even though a recession is most likely inevitable, depending on the path that the stock market takes, its effect could be minimized.

The stock market is likely to make a rebound

People who have been following the stock market know that the S&P and the NASDAQ have both been struggling considerably. Both of these major stocks have dropped a significant amount, with each one losing almost 1.5%.

Other companies saw their stock nosedive, like Nike losing a little over 12% of its price following lower profits.

However, these types of falls rarely keep the stock market down, and many analysts believe that it will eventually rebound. Analysts are expecting the stock market, and the S&P specifically, to make a rebound that could change the course of the recession.

If it does rebound, then it is very likely that the recession will only last throughout the year 2024, and will not have many lasting repercussions. But if the market fails to make a rebound, then it is likely that the recession will resemble something closer to what Americans saw during 2008.

The pound and euro plummeting

In other major developments surrounding the stock market, the price of the Pound and Euro are plummeting. The falling prices were a little shocking to see, as they quickly reached all-time lows.

A major reason for that these prices sinking is that the US dollar has made a very significant push to the top. This push ended up putting more pressure on a range of other fiat currencies, which is why multiple currencies happened to drop along with the Euro and Pound.

Analysts believe that the dollar is likely to make it to the top as long as it can make a clean break of 110 and 111.5 levels on the dollar index.

Could this recession be a short one?

According to various analysts, it is very difficult to say just how long this recession could be, given the incredible volatility of the stock market. But if the stock market does manage to recover and bounce back, it is very likely that the recession will only last a year and do relatively less damage.