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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