On the NBER "Recession ended June, 2009" and Stock Market Returns (it may not be good)

From CNBC's Behind the Money column:

On Monday, the Business Cycle Dating Committee of the National Bureau of Economic Research declared that the recession officially ended in June 2009.

The academic group based in Cambridge, Massachusetts and formed five recessions ago in 1978 takes their time in making this decision. So long in fact, that by the time they declare it over, the best of the stock market rally may already be over.

“In three of the four periods (since the NBER was formed), the S&P 500’s performance in the year after the official declaration was worse than in the period between the end of the recession and the official declaration,” according to Bespoke Investment Group data.

In the 15 months since the latest recession has ended, the S&P 500 has jumped 26 percent. If history is any guide, don’t expect more than that from the market over the next 12 months. Despite this track record, stocks still posted big gains yesterday on the news.

“The equity market rejoiced, which itself is amusing since supposedly the stock market is a discounting mechanism, but it goes to show that old news sells well,” said David Rosenberg, chief economist and strategist at Gluskin Sheff. 

“Just remember this: the NBER also told us some years back that the prior recession ended in November 2001. Yet because we had a limbless recovery — one hand and one leg perhaps — the bull market in stocks and bear market in bonds was delayed for a year and a half back. And this recovery, with its sub 1% pace of real final sales, goes down as the weakest on record.”...MORE