9 June | S&P 500

US stock market excludes possibility of recession — The Leuthold Group

US stock market excludes possibility of recession — The Leuthold Group

According to a study by The Leuthold Group, the US stock market seems to be ruling out the risk of a recession in the country. Traders' actions indicate their confidence in the further growth of the American economy.

The analysts' conclusion is based on the ratio of cyclical and defensive stocks in the S&P 500 index. This is a key indicator that compares sectors that are most sensitive to economic fluctuations with more stable industries. The first group typically includes consumer products and commodities, while the second consists of utilities, healthcare, and essential goods.

Cyclical stocks usually trade at a discount during recessions because their earnings are more vulnerable to economic downturns. Meanwhile, the value of defensive assets remains rather stable, so market participants are willing to pay a premium for them.

In May, the ratio reached a record high of 1.19, indicating a 19% premium for cyclical sector stocks. In contrast, during the crises of 2000, 2008, and 2020, these stocks traded at a discount due to fears of a recession. According to The Leuthold Group experts, the US stock market is currently ignoring the threat of an economic downturn.

Elena Dorokhina MarketCheese
Period: 31.08.2025 Expectation: 3000 pips
US trade tariff update triggers stock market correction
Yesterday at 11:42 AM 21
Period: 29.08.2025 Expectation: 3500 pips
Technical indicators on GBPUSD chart signal rebound
Yesterday at 10:00 AM 23
Period: 08.08.2025 Expectation: 1000 pips
Next GBPUSD downside target is 1.313
Yesterday at 08:40 AM 13
Period: 31.08.2025 Expectation: 300 pips
Buying Brent during price gap closure phase
Yesterday at 04:41 AM 31
Period: 30.08.2025 Expectation: 1400 pips
Buying EURUSD after price slump
Yesterday at 04:41 AM 27
Period: 06.08.2025 Expectation: 2300 pips
USDJPY likely to correct before rallying
31 July 2025 51
Go to forecasts