Why the Stock Market is Finally Paying Attention to the Economy

The Labor Market

The unemployment rate, which has been on the decline over the past few months, only recently fell back below the peak level during the Great Recession in 2008–2009 (red dotted line), as shown on the chart below:

The Business Sector

Layoffs may save companies money, but that doesn’t mean they’ll be in good shape any time soon. Filings for Chapter 11 bankruptcy increased once again in September to approach the levels we saw just two months prior in July, as shown on the chart below (via Epiq AACER):


We are truly surprised at how optimistic so many analysts in the media have been on the so-called recovery. At Dohmen Capital Research, we prefer to look at the long-term economic trend. We will see rebounds from this year’s lows in sales and earnings, but a return to last year’s levels will be elusive in most industries.



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Dohmen Capital

Dohmen Capital


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