In 2024, the stock market has shown undeniably strong performance, with the benchmark S&P 500 index up 12.68% year-to-date (YTD), even after experiencing a 5.09% drop in the last 30 days.
However, the fragility of the bull market was highlighted at the start of August, as a weaker-than-expected employment report sent the markets reeling and, when paired with the damage from the yen carry trade, led to the single worst session since 2022.
Research by Finbold on August 13 revealed that these events have heightened public anxiety about a potential economic downturn, as indicated by a 244.82% spike to the maximum value of 100 in Google searches for ‘recession’ in the United States between August 4 and 10.
Washington, D.C. the most worried about a looming recession
Among the individual regions and states within the US, netizens in the District of Columbia appear to have been the most concerned a recession is coming, with the local search volume hitting the maximum reading of 100 between August 4 and 10. They were closely followed by Californians, where interest rocketed to 94.
In the investment heart of America, New York, concern also surged but not as much as in 13 other states and districts, reaching 77. Based on data made available through Google Trends, the least concerned Americans reside in West Virginia, where interest did not move above 55.
Recession fears and high interest rates put pressure the whole world over
A similar trend can be observed worldwide as search volume for ‘recession’ rocketed 177.78% by the period between August 4 and 10. Among the global netizens, New Zealanders appear to have been the most concerned, closely followed by Singaporeans.
New Zealand has been affected by some of the same financial pressures as the US. Most recent reports indicate that the aggressive rate hiking policy in the country led to heightened unemployment and saw the exodus of more than 130,000 people between June 2023 and June 2024.
Among the worldwide searchers, Americans proved the 5th most worried, with the Irish and Canadians being ahead in third and fourth place.
Investors fearing recession seek to buy gold
Finbold’s research at the start of August also found that the major stock market selloff did more than raise concerns about and interest in ‘recession,’ as Google Trends data revealed heightened interest in investing in gold.
The high volume recorded for the ‘buy gold’ search term can be attributed to the commodity’s status as a safe haven asset, which tends to serve well as a store of value in times of crisis. It can also, however, be attributed to the precious metal’s exceptionally strong performance in 2024, which saw it rise nearly 20% since the year started.
Experts divided on the likelihood of a financial crash
Much like the markets in 2024 were marked by contradictions, with recessionary fears coexisting with record highs for benchmark indices and major stocks, experts have been divided in their analysis of the actual state of the economy.
Some, like Wedbush’s Dan Ives, see the coming months as the continuation of the artificial intelligence (AI) boom and the start of a supercycle for big tech giants like Apple (NASDAQ: AAPL).
On the other hand, there has been no shortage of expert warnings that the very same AI boom has already created a dangerous bubble which is only contributing to the instability created, in part, by a fiscal policy unsustainable enough that the International Monetary Fund has been issuing warnings to the US.
Elsewhere, the summer of 2024 has started seeing major institutional investors, such as the $300 billion mutual fund Northwestern Mutual Wealth Management, make massive bearish bets.
Finally, the current expectations that the Federal Reserve will begin cutting interest rates at the September Federal Open Market Committee (FOMC) meeting might give the economy the boost it needs to avoid a crash.
Still, some expert investors, such as Steve Eisman, one of the big winners of Great Recession trading, have previously warned that it is precisely the FED that could kickstart a recession by prematurely lowering rates and supercharging the bubble to the point of bursting.
