Buyers hoping that the worst of the bear market has already occurred could also be overly optimistic, historical past reveals. Financial institution of America technical analysis strategist Stephen Suttmeier stated in a notice to shoppers over the weekend that the market may take one other leg decrease if the U.S. economic system falls right into a recession, as many count on, as a result of the S & P 500 hardly ever bottoms out earlier than a recession begins. “Historical past means that if the US economic system experiences a recession, the SPX bottoms out through the recession and never earlier than. Solely the March 1945-October 1945 recession noticed the SPX rally forward of and all through the recession,” the notice stated. “Common and median SPX declines related to recessions are 32.5% and 27.1%, respectively, and lasted 13.1 and 14.9 months, respectively. This equates to SPX 3500 to SPX 3240 in February to April 2023,” Suttmeier added. The S & P 500 closed Friday at 4,071.70. The U.S. suffered two consecutive quarters of unfavorable financial progress earlier this 12 months, however that has not been declared a proper recession by the Nationwide Bureau of Financial Analysis . Job progress has remained constructive, and U.S. GDP grew once more within the third quarter . Some Federal Reserve officers are holding out hope for a so-called “delicate touchdown,” however many economists and traders count on a recession subsequent 12 months. A speedy slowdown within the housing market, tech sector layoffs and a falling financial savings price are among the areas which have raised concern concerning the course of the economic system. Canaccord Genuity strategist Tony Dwyer is among the Wall Avenue execs who sees a recession and a market backside coming quickly. Dwyer stated in a notice to shoppers Monday that he has a “very excessive conviction” that there can be a recession in 2023, with the potential for a market rebound later within the 12 months. He pointed to the historic monitor document of market bottoms coming after the beginning of a recession as one cause for short-term pessimism concerning the market. “We proceed to imagine threat property ought to backside within the first half and might even see a major rally within the second half because the Fed realizes it has gone too far with price hikes in a levered system and modifications course sooner than anticipated. We’d enter 2023 with a extra defensive posture, with a watch on including threat because the market begins to extra absolutely mirror the chance of recession,” Dwyer stated. — CNBC’s Michael Bloom contributed to this report.