How accurate are markets at predicting recessions? tastytrade's Research Team crunched some numbers and examined some data to uncover the answer.Study
- S&P 500, 1970 to present
- Recorded all recessions since 1970
- Recorded number of large selloffs greater than 1% in each quarter
We find that the number of large down days is actually greatest in the quarter before the first quarter of a recession. During the recession, there are typically more down days than the average quarter, but not as many as the quarter preceding the recession.