Inflation is one of the biggest headwinds facing the global economy and the stock market, but the dollar is still the safest asset class during these uncertain times. Despite the recent rate hikes and the Russia-Ukraine war, inflation in the US and the UK remained steady in June, and the dollar has gained versus most major currencies. However, that doesn’t mean that stocks can’t fall in the short term.
One stock that has shown resilience to recession worries is Walmart Inc. It is one of the 30 constituents of the Dow Jones Industrial Average and has recouped all of its losses during the COVID-19 selloff. In fact, in April of 2020, it hit a new record high. The stock has even been promoted as a leading recession-resistant investment, despite the negative news about the economy. However, this isn’t the only blue-chip company that has shown resilience to recessions.
The Great Recession was a global economic slowdown in 2008-2009. The global economy slowed to a crawl in the fourth quarter of 2008, and GDP growth turned negative. By December 2008, the U.S. economy entered a recession that lasted until June 2009. Various other countries, including France, Germany, and the United Kingdom, also experienced a slump. The global economy experienced a recession, which many economists consider to be the worst since the Great Depression.
While the dollar extended its recent pullback, stocks rose again on Wednesday. The dollar fell slightly after preliminary data from the Commerce Department showed the U.S. economy contracted 0.9% in the second quarter. The report followed earlier concerns about a potential recession. On the other hand, a report from Metaplatforms (META) showed that its revenue forecast for the current quarter was below expectations. However, this news is tempered by the news that META plans to cut its spending on black holes.
The stock market’s recent rise should help consumers adjust their spending habits. The stock market plunge threw millions of Americans into financial ruin, but it is not believed to have been responsible for the Great Depression. In fact, only 10 percent of American households had stock investments, but almost a third of them lost their jobs and their entire savings. The link between the crash and the subsequent hardship is the underlying weakness in the economy.
To survive a recession, marketers must remain agile and nimble. They must be able to respond quickly to the upturn when it does arrive. As consumers’ attitudes toward the economy improve, they will be ready to try new products and services. Companies that wait until the economy rebounds completely will be at the mercy of better-prepared competitors. For many brands, novelty is essential in retaining existing customers. The stock market will rebound in the short term, but there are still some risks to consider.
