Capital Markets Summer 2022: Revealing Recession Patterns

I

Fundamentals in Recessions Revealing Recession Patterns

• In the last three recessions, the median S&P 500 EPS drawdown has been 20%

• Economically sensitive value stock fundamentals have done worse than those of growth stocks

I

II

S&P 500 EPS Drawdowns Around Recessions

But Growth EPS Has Held Up Better

S&P 500 Growth

S&P 500 Value

2001

2008/2009

2020

III

10%

5%

0%

-16%

IV

-5%

-20%

-10%

-15%

V

EPS Peak to Trough

-20% Cumulative Change

-39%

-25%

-12-10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18

Months Before and After Start of Recession

Source: FactSet and Alger analysis. S&P EPS Drawdowns are next 12-months, peak to trough. Growth and Value EPS based on average of last three recessions.

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