Stress & Growth Perspectives

This two-chart combo presents a panoramic view of market performance in response to economic growth and financial stress, featuring the St. Louis Fed Financial Stress Index, GDP, and the Wilshire 5000 Total Market Full Cap Index.

  • Chart 1 - The Financial Stress and Market Performance Connection: This chart brings together the Wilshire 5000 Index and the St. Louis Fed Financial Stress Index, revealing the market's reaction to different levels of financial stress. Typically, the Wilshire 5000 Index takes a hit during times of high financial stress and enjoys growth when the waters are calmer. This highlights the crucial role that stability and confidence play in financial markets.

  • Chart 2 - The GDP and Market Dance: The second chart puts GDP, a critical measure of the U.S. economy's health, side by side with the Wilshire 5000 Index. The rise and fall of GDP usually have a direct impact on this index. When the economy expands, equity markets often follow suit, as demonstrated by a climbing Wilshire 5000 Index. But when economic growth slows or contracts, the index usually underperforms.

Both charts illustrate how sensitive market performance can be, swaying with macroeconomic conditions (like GDP growth or contraction) and financial stress levels. This holistic view provides a comprehensive tool for strategic decision-making, considering both economic growth and stability.

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