The stock market comeback has proceeded at a rapid clip for more than two years. Yet the economic recovery has been frustratingly slow. Since April, however, a spate of disappointing economic news has interrupted the market rally. The downturn in stocks has money managers questioning whether the market can pull out of reverse and again leave the sputtering economy in its dust. If it does, credit the same factor that has driven stocks up 89% since their bottom in March 2009: record corporate profits. It’s a concern that will be top of mind at the annual Morningstar Investment Conference. The nearly 1,700 financial planners and fund managers meeting in Chicago this week face a complicated picture about where to put their clients’ money. It’s hard to find any clear choices now—two years after the recession’s official end in June 2009—with 9.1% unemployment, falling housing prices and weak consumer spending. Stocks have fallen five weeks in a row and appear headed toward a sixth. The Standard & Poor’s 500 index is down 6% since the end of April. Many financial analysts think this slump is more serious than the market’s other pauses in the past two years.
Today’s question: Is the U.S. economy headed for a second recession?
