Key economic indicators appeared to corroborate what many have long suspected

This year, there had been substantial discussion regarding what defines a recession. While the United States has met many of the indicators of an economic downturn
 
WAN CHAI, Hong Kong - Nov. 18, 2022 - PRLog -- A major economic measure revealed early Thursday appeared to tilt the scales in favour of those claiming the country is in a recession.

With this backdrop, NVIDIA Corporation (NVDA) fell as much as 5.5%, Snowflake Inc. (SNOW) fell as much as 4.5%, and Roku Inc. (ROKU) fell as much as 8.4%. At 12:33 p.m. ET, the three were still down 4.4%, 1.5% and 8.3%, respectively.

To be clear, there was virtually little company-specific news that drove these technology companies down. This shows that investors were dissatisfied with the latest economic assessment, prompting some to flee.

The United States Bureau of Economic Analysis presented its assessment on the status of the economy, specifically its GDP calculations for the second quarter and the disclosure appeared to validate investor's biggest fears. Following a 1.6% fall in the first quarter, GDP decreased at an annual pace of 0.6% in the second quarter of 2022. This is the same as the first estimate. The most often accepted definition of recession is two consecutive quarters of a decreasing GDP, implying that the U.S. economy has entered a downturn on the early parts of this year.

According to the study, the lesser fall in the second quarter was due to higher consumer expenditure and an increase in exports. In all, nine of the report's 22 industrial groupings contributed to the GDP drop.

It's worth noting that the National Bureau of Economic Research's "official" conclusion on a recession is made by eight experts. This panel examines a slew of economic indicators, including as nonfarm payrolls, industrial production and personal consumer expenditure, in formulating its decision, which has typically been revealed far into a recession – or even after it has ended. The committee has yet to release its conclusions on the present economic crisis.

A search of the typical suspects (business press releases, regulatory filings and analyst views) yielded no triggers to explain the fall in share price for this trio of stocks. This shows that the fall is largely a reaction to the bleak economic facts. However, investors should keep in mind that many of these economic indicators look to the past rather than the future – and the future looks good for these three technology firms.

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