Enjoy the bear market rally while it lasts

Investors seem to think that a weaker US economy will cool inflation and see the Fed relent on interest rate rises. But that optimism may be misplaced, with July’s stockmarket gains looking very much like a bear-market rally.

Times Square, New York
While US GDP is shrinking, America’s unemployment rate is at a 50-year low
(Image credit: © Noam Galai/Getty Images)

Recession? What recession? The US economy shrank at an annualised pace of 0.9% between April and June, its second successive quarterly contraction. In many countries that would meet the definition of a recession, but with unemployment close to a 50-year low and two vacancies for every jobseeker in May, the White House has rejected the label. “That doesn’t sound like a recession to me,” says president Joe Biden.

“The official designation is determined by eight economists” at the National Bureau of Economic Research, who also look at measures of jobs growth, income and spending to make a recession call, say Nicole Goodkind and Tal Yellin for CNN. They don’t think this slowdown qualifies.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.