What a Non-Recessionary Bear Might Look Like

Bear markets can occur without recessions. There have been ten bear markets in the S&P 500 since 1968, and four of them occurred without an accompanying recession. Bear markets are commonly defined as 20% peak-to-trough declines based on closing prices, though we include two 19% drawdowns in this analysis, with one of them (1998) getting well past the 20% mark on an intra-day price basis (1976 is the other). Here we look at the characteristics of these non-recessionary bear markets to assess the probability that stocks enter a bear market even if the U.S. avoids recession in 2016.

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