2 min

August 1, 2022 - In A Nutshell

Aug 18, 2022
in a nutshell
  • People are talking about a potential recession after the U.S. marked two straight quarters of economic shrinking.
  • The economy shrinks when a country’s GDP (Gross Domestic Product, or how much stuff a country produces) goes down.
  • The Fed raised interest rates again last week to keep tackling inflation.
Image of Your weekly round-up of money news and what it means for your long-term financial wellness for the week of August 1, 2022.
in a nutshell
  • People are talking about a potential recession after the U.S. marked two straight quarters of economic shrinking.
  • The economy shrinks when a country’s GDP (Gross Domestic Product, or how much stuff a country produces) goes down.
  • The Fed raised interest rates again last week to keep tackling inflation.

In the Markets

People are talking about a potential recession after the U.S. marked two straight quarters of economic shrinking.

Despite the headlines, the market was up last week, as investors have high hopes for what’s ahead. Learn more below, but first...

Remember what we’ve learned from previous recessions:

  1. Historically, recessions have been a good time to invest more, while many stocks are lower priced. If you’d invested $10,000 in the S&P 500 when the market tanked in 2009, it would be worth over $50,000 today.

  2. Withdrawing money during a downturn guarantees the loss. Sticking with it gives your investments a chance to recover.

  3. In summary, panic doesn’t pay, but leaning into the dip can.

History doesn’t predict the future, but it can signal what may be ahead, to help us stay calm and focused on our long game.

Following two straight weeks of gains, the markets dipped this week after an unprecedented sell-off in the oil market, but closed today’s session sharply higher.


• Oil prices turned negative for the first time in history as stay-at-

• The week ahead will be a busy one for earnings: Companies will disclose results for the most recent quarter, and experts will review a key report on economic growth. Here’s what to watch in the week ahead.

Under the hood

The economy shrinks when a country’s GDP (Gross Domestic Product, or how much stuff a country produces) goes down.

GDP is based on the amount of money spent in 4 main categories:

People: How much money we spend. Usually, people spend less money in a recession, though recent GDP reports show that people are still spending.

Business: How much is money invested by businesses. This typically goes down in recessions, as businesses conserve costs.

Government: How much money the government spends or invests. Governments tend to spend more money in recessions, to help boost the economy.

Trade: How much money is made from selling goods or services to other countries, compared to the amount spent on importing goods or services. In a typical recession, trade is positive, as people buy less and fewer goods are imported.

What else?

The Fed raised interest rates again last week to keep tackling inflation. With the increases in food and energy prices slowing, and in some cases starting to fall, we might be nearing the end of the rate hikes.

Job reports are strong, with a historically low unemployment rate of 3.6%.

Stocks jumped after news of a potential recession, largely because investors are looking forward with high hopes.

Remember, the stock market’s performance mostly reflects future expectations, not the most recent headlines.

If you can, consider a $5 boost to your Recurring Investment for a better chance of taking advantage. Recurring Investments help you buy more when prices are low, and less when they’re high — all on autopilot.




This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Article contributors are not affiliated with Acorns Advisers, LLC. and do not provide investment advice to Acorns’ clients. Acorns is not engaged in rendering tax, legal or accounting advice. Please consult a qualified professional for this type of service.

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