A Declining Stock Market Portends a Recession in 2013
Don’t get your hopes up for 2013. After a fairly robust year in 2012, the stock market is expected to experience real turbulence in 2013. America will experience an economic slowdown—one that could rival Europe’s.
Europe’s debt crisis seriously impacted North American sales during the first half of 2012. For American companies with operations in Europe, a weaker euro translates into weaker European sales. Demand is also tapering off in formerly reliable growth markets, including China, India and Brazil.
At the same time, you don’t need a full-blown correction to have a reduction in corporate earnings. To get the dominos started, you just need a slow growth rate with rising costs, and that’s exactly what America has. In 2013, GDP is expected to be just 1.7%. While the Federal Reserve says inflation will increase just two percent in 2013, global indicators suggest it will be much higher. Read More