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Futures indicate that the US stock market could suffer another iffy day when trading resumes, putting it perilously close to bear market territory.
Goldman Sachs’ chief global equity strategist Peter Oppenheimer has therefore updated his bear market anatomy report, and made it public for Alphaville readers here.
After all, as Oppenheimer points out, not all bear markets are created equal, and its nature “has some bearing on the triggers, timing and speed of the recovery”.
Here you can see a full list of every US bear market going back to the early 1800s, how long they lasted, how deep they were and how long it took for stocks to fully recover (higher-res here):
As you can see, Oppenheimer sorts bear markets into three main categories: structural, cyclical and event-driven.
He reckons that we are now on the cusp of a classic event-driven one — triggered by the new American tariff regime — but warns that it “could easily morph into a cyclical bear market given growing recession risk”.
This matters most for how long it might prove to be. The damage tends to be roughly equal, but event-driven ones tend to be brief (and therefore perfect for dip-buying investors) while cyclical bear markets on average last two years, and it take about five years to fully recover the lost ground.
Anyway, there are lots of other interesting titbits in the full report, which you can read here.