“S&P 500 Shows Signs of Recession” – David Rosenberg.

The S&P 500 is showing signs of a recession as stocks closely linked to the real economy edged lower, according to top economist David Rosenberg.

“The question always arises – why is the S&P 500 not signaling a recession? Answer: “it shows,” the head of Rosenberg Research tweeted today.

“The most sensitive economic areas decreased by -33%: transport, consumer discretionary sector and banks. They are behaving as they did before the 1990-91, 2001 and 2007-09 downturns,” he added.

Rosenberg’s forecast comes despite the benchmark index growing by about 7.7% this year.

Bank stocks have taken a big hit this year thanks to the fallout from Silicon Valley’s shock collapse. A wave of deposit withdrawals and fears of a credit crunch spooked investors, subsequently weighing on shares of small and medium-sized banks, including PacWest and Western Alliance.

Rosenberg does not shy away from gloomy forecasts for the US economy. The veteran economist recently predicted that the recession has already hurt the profits of American corporations.

Market guru Larry McDonald also warned of a looming recession in a recent interview, saying the S&P 500 could tumble nearly 30% by December as declining corporate profits, less government spending and bank stress weigh on on the shares.