Recession and Investor Opportunities

A recent article in Morningstar suggests that, whether or not we are technically in the throes of a recession today, “we must gird up for the inevitable recessionary environment wrought by the devastating social and economic impact of the ongoing coronavirus pandemic.” But the length of such a recession or the recovery on the other side of it are both difficult to predict, the article says. It cites comments from Morningstar health strategist Karen Andersen,… Read More

Mark Mobius: No Recession and Trump in 2020

In a recent interview with Barron’s sister-publication Financial News, veteran investor Mark Mobius said, “I don’t see a recession risk,” explaining, “the simple reason is that with interest rates going down and down, it will be much easier for people to raise capital. There is a lot of money sloshing around the world looking for a home.” Mobius suggested there might be a “slowdown” due to trade tensions but added that a recession in Europe… Read More

How Bad Will the Next Recession Be?

While we may know that a recession is coming, a recent Washington Postarticles argues that the timing and severity is difficult to predict. Still, it says, we can look for clues based on what has happened in the past. Here are some highlights: According to data from the National Bureau of Economic Research, the average duration of the 11 recessions that have occurred since WWII has been 11.1 months, with the shortest among them lasting… Read More

NABE Survey Shows Most Economists Predict Recession in 2021

A survey by the National Association for Business Economics (NABE) released last month shows that more than three-quarters of business economists expect the U.S. to enter a recession by the end of 2021, according to a recent article in Bloomberg. The article also notes that most survey participants believe the Fed will continue raising rates this year. Of the nearly 300 NABE member survey participants, the article reports that “ten percent saw a recession beginning… Read More

Leuthold’s Paulsen Sees Recession Red Flag

“For the first time since before the 2007-2009 recession, premiums on the lowest-rated tranche of investment grade U.S. corporate bonds have risen to 2 percent after being below that level,” based on data gathered by the Minneapolis-based research firm the Leuthold Group. This according to a recent article in Bloomberg. In a note to clients last month, Leuthold chief investment strategist Jim Paulsen wrote, “We are not sure why a 2 percent credit spread has… Read More

Pimco Says U.S. Recession Possible in Next Three to Five Years

In a report outlining its market outlook, Pimco said it sees the potential for a recession hitting over the next three to five years. This according to a recent article in Financial Advisor. Forecasting a chance of “less market-friendly central banks,” the asset manager advised clients to reduce the riskiness of their corporate debt holdings and limit exposure to the euro region’s peripheral countries,” the article reports, adding that three Pimco executives say a U.S. recession… Read More

Economists Predict the Next Recession Hits in 2020

The majority of economic forecasters surveyed by The Wall Street Journal think the current expansion will likely end in 2020, “only after setting a record for longevity.” The survey, conducted early in May, involved 60 business, financial and academic economists. The article reports that 62% or participants said the primary cause of the next downturn would be “an overheating economy leading to Fed tightening.” At least 5% of participants, the article reports, cited “a financial… Read More

Summers Says Next Recession Could Be Longer Than Last One

Former Treasury Secretary Larry Summers believes that the next U.S. recession could “drag on longer than the last one that stretched 18 months.” This according to a recent article in Bloomberg.   Even if the Fed were to tighten the reins considerably, he argues, it would take time before rates would get high enough to allow for a 500 basis point reduction typical for a recession.  The article quotes Summers: “That suggests that in the… Read More

New Study Links Pregnancy Rates to Recession

A new report published by the National Bureau of Economic Research (NBER) reports that “a falling conception rate in the U.S. has consistently preceded the economic downturns of the last three decades,” according to a recent CNBC article. The NBER used high-frequency data from birth certificates to examine fertility trends across the 109 million births in the U.S. between 1989 and 2016, “tracking their changes in relation to business cycles,” the article reports. The study… Read More

Glassman: Worrying About the Next Recession Won’t Help

The tenacity of the current bull market begs the obvious question as to when it will end and, as we approach the election, uncertainly is heightened by recent lackluster GDP reports. In a recent issue of Kiplinger, James Glassman points out that although Americans consider the economy the nation’s “most important problem by far” (according to a Gallup poll), “you may be surprised to learn that the U.S. is currently in the midst of its… Read More