What happened
Shares of the e-commerce company Etsy (ETSY 0.25%) were falling today, likely as investors worried that a potential economic slowdown could hurt Etsy's growth.
Some bank CEOs made comments today saying that they're seeing slowing consumer spending, which could spell short-term trouble for the e-commerce company. As a result, Etsy's stock was down by 3.6% as of 3:38 p.m. EST.
So what
Bank of America CEO Brian Moynihan said at a conference today the "rate of growth is slowing" for credit card volume at the bank.
Moynihan thinks that the U.S. economy will have several quarters of negative growth next year before growing slowly in the fourth quarter.
NYSE: ETSY
Key Data Points
Wells Fargo CEO Charlie Scharf didn't have a much brighter outlook either. "We are expecting a fairly weak economy throughout the entire year ... ," he said today.
Etsy investors appeared to take these comments to heart today. Investors have generally been on edge as they're growing increasingly concerned that the Federal Reserve's interest rate increases -- intended to tame inflation -- will end up pushing the U.S. into a full-blown recession.
The Fed will meet again next week, and most economists are expecting officials to increase rates by 50 basis points.
Now what
Etsy's share price has surged over the past month after the company reported record Black Friday sales in the third quarter.
But today's drop shows that Etsy investors are still concerned that a slowdown in the economy will negatively affect the company's business.
While that could prove true in the near term, investors with a longer investing time frame should remember that panic-selling a stock on recession fears isn't the best strategy.
Instead, investors should take any new economic data and apply it to their original investing thesis to see if anything fundamental has changed with the company or its long-term outlook.
