Dear readers, amidst the current sell-off of global equities, the larger question on the minds of many investors is whether a US recession is coming.
The July 2024 US jobs reports showed that 114,000 jobs were added in Jul 24 and this placed the US unemployment rate at its highest level since 2021. With this, the 3-month moving average for the US unemployment rate was brought to at least 0.5% above the 3-month moving average from the previous 12 months and this pointed to a possible US recession according to Sahm rule
I only learnt of Sahm rule and the likelihood of a possible US recession in my recent reading. It is interesting to note that the moving averages which I first learnt in my investing journey and one that I still appreciate for the simple beauty could also be used on the unemployment figures front.
Apart from the above indicator, I also read that one of the stock market’s “fear index”, the CBOE Volatility Index or the VIX has reached its highest level in the VIX’s 17 months.
When stock markets are correcting, I also think it is just so natural that investors and analysts who are of the “bearish camps” will be coming out and weighing their opinions of the stock markets corrections.
As a seasoned investor who has been investing for many years, I believe it is important for investors to ignore all the market noise and continue to invest whenever opportunities arise.