« The economy will chug along and we probably won’t see a recession, » Goldman Sachs CEO David Solomon said on Tuesday.
Investors were whiplashed Tuesday as stocks rebounded following Monday’s sharp decline.
The S&P 500 and Nasdaq 100 jumped about 1% in Tuesday’s trading session, as investors grappled with whether the unwind of the yen carry trade was a short-term technical factor.
Concerns of an imminent recession following the trigger of the Sahm Rule last week were dismissed by the inventor of the rule, former Fed official Claudia Sahm, who told Business Insider that the surge in the unemployment rate is being driven by an increase in labor supply rather than a decrease in labor demand.
« The US economy is still growing. We are still adding jobs. We are spending even after inflation », Sahm said.
Meanwhile, Wall Street strategists said that the current decline in the stock market, with the S&P 500 being down about 8% since its July record on Monday, is completely normal.
« While such sharp declines in equity prices are concerning, looking back at historic data on the S&P 500 index reminds us that dips, pullbacks and corrections of 10% or more are a normal and healthy part of any bull market.
