- Futures on the Dow and S&P 500 edge slightly lower in overnight trading.
- America’s so-called ‘growth recession’ could prolong the business cycle and make certain stocks attractive over the long haul, according to Credit Suisse.
- An extended business cycle is likely to benefit growth stocks over value plays.
Futures on the Dow Jones Industrial Average (DJIA) flat-lined in overnight trading Wednesday, as investors took a pause following a record-breaking rally at the start of the week.
Dow Futures Edge Slightly Lower
Futures on all three major U.S. indexes were mixed in overnight trading, reflecting a tepid conclusion to the New York session. Dow Jones futures edged down 13 points, or 0.1%, to 27,408.00. The contract was off 47 points earlier in the evening.
Futures on the Dow Jones Industrial Average are in need of direction Wednesday. | Chart: Bloomberg
S&P 500 futures fell 0.1% to 3,070.25. The Nasdaq mini futures contract flat-lined at 8,209.50.
Growth Recession Could Be Good for Stocks
As America’s economic expansion extends into year 11 – the longest in history – investors are beginning to worry about overvaluation risks upsetting their portfolios. According to analysts at Credit Suisse, America’s so-called ‘growth recession’ might be a good thing for stocks as it prolongs the business cycle, reduces volatility and favors some stocks over others.
Although you won’t hear about ‘growth recessions’ in classic economic textbooks, they have become the new norm in today’s world. The U.S. economy is said to be in a growth recession today because it’s expanding below trend and showing signs of decelerating. But Credit Suisse analyst Jonathan Golub says this could be a good thing for growth stocks and other segments of the financial market.