First when will the default happen? Roughly.
Second how bad will it be and in which market segments?
Early June to late July. No way I know of to pick the worst segments.
There will not be a default. There is no need for one, and several ways to avoid. Consumer Staples and Healthcare stocks generally do well in recessions, because people have to continue buying these items. International stocks might do well for US investors if the dollar weakens.
— links —
“From its peak at the end of April 2011 to its low in early October 2011, the S&P 500® shed 19.4% of its value in what would be one of the deepest corrections in prices during the 2009-2020 bull market. Small and mid-cap stocks fared worse, with the Russell 2000 losing 29.6%, the S&P MidCap 400 falling 26.6% and the S&P SmallCap 600 losing 26.7%. The tech-heavy Nasdaq 100 was the outperformer, losing a relatively low 16.1% peak to trough… The various sector indexes all fell during this period but in highly varying degrees. Among the hardest hit were the various financially related indexes including regional banks, financials, and insurance. The relative outperformers included consumer stocks (discretionary and staples), information technology, health, retail and utilities”
“Late-stage funding into startups has come to a crawl. Many startups have approaching out-of-money dates… This “liquidity crunch” has limited the “return potential for investors and is restricting the flow of capital back into the venture ecosystem,” PitchBook said.”
“The primary reason to invest internationally is diversification… There are a lot of factors that explain the most recent outperformance for US stocks, but the most significant one is simply the strengthening of the dollar over that time period.”
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