If history is a guide, the S&P 500 stock index may have another 8% to 20% to fall from the current level in the event of a recession, according to an equity research report issued Monday by Standard & Poor’s. Depending on the severity of a potential recession, the report by S&P’s chief investment strategist Sam Stovall sees the firm’s flagship index bottoming at somewhere between 900 and 1030.

Markets have swung wildly in recent days, with widely followed commentators such as DoubleLine’s Jeffrey Gundlach seeing parallels to the crisis of 2008 that sent markets diving. The lesson of 2008, according to S&P’s Stovall (left), is: “Be proactive and expect the worst.” In order to arrive at estimates of what the worst might look like, Stovall crunched the numbers for recessions since 1948 and found that earnings per share on average declined 15% to 20% and that trailing P/E ratios fell to 12 or 13 during market sell-offs.

Complete your profile to continue reading and get FREE access to BenefitsPRO.com, part of your ALM digital membership.

Your access to unlimited BenefitsPRO.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical BenefitsPRO.com information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com

Already have an account?



Join BenefitsPRO

Don’t miss crucial news and insights you need to navigate the shifting employee benefits industry. Join BenefitsPRO.com now!

  • Unlimited access to BenefitsPRO.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
  • Exclusive discounts on BenefitsPRO.com and ALM events.

Already have an account? Sign In Now
Join BenefitsPRO

Copyright © 2023 ALM Global, LLC. All Rights Reserved.