Soaring Into a Recession

By Alex Eule |  Monday, June 8

A Perfect V. This won't come as a surprise to anyone, but we are officially in a recession. The word came down today from the National Bureau of Economic Research, which has the honor of tracking economic cycles. The recession, the NBER  says, began in February, ending an 11-year period of economic expansion that was the longest in U.S. history.  Here's the NBER:

The committee recognizes that the pandemic and the public health response have resulted in a downturn with different characteristics and dynamics than prior recessions. Nonetheless, it concluded that the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contractions.

So how did the market respond? Much like it has to all bad news in recent weeks -- it continued going higher. In fact, it was a momentous day for stocks on several fronts. The Nasdaq Composite rose 1.1% to an all-time high. For the tech-heavy index, the four-month chart makes a nearly perfect V. 

The S&P 500 meanwhile, was up 1.2%, putting it back in positive territory for the year. It's 4.5% away from its own record close. The Dow Jones Industrial Average outpaced everyone, rising 1.7%, boosted by a continued rally in Boeing's stock, which makes up an outsize portion of the 30-stock index.

Boeing, you may recall, had plenty of problems before coronavirus, but it has now become a prime way for investors to play an economic rebound and the return of travel. Boeing stock is already up 58% in June. Al Root has more on the rally at Barrons.com. 

It was a mixed day of news on the virus front. The World Health Organization reported 136,000 new cases globally Sunday, the most of any day since the crisis began. But the WHO had some potentially positive news, as well, saying that it now seemed "very rare" for asymptotic Covid-19 carriers to spread the disease. That's a major revision from earlier thinking and could change the way we combat the disease in the months to come.