Recession economics help

If you're looking for capitulation in 2022, it's in the bond market. And that tells you that investors' confidence in the global economy is very low. Inside the stock market, it's all about defense. Defensive stocks, which include big healthcare companies and dividend-paying value stocks, have been driving the gains. An index of global defensive stocks put together by Goldman Sachs, which is heavy in healthcare giants, has climbed to more than an 18-month high relative to the MSCI AC World Index. Inside the U.S., the defensive ETF ticker DEF has been outperforming the Spider ETF SPY all last week and all year. For market watchers, this feels a whole lot like a recession trade. While investors in the capital markets are battening the hatches for a recession, money in the private markets is also drying up. The value of venture capital deals in the U.S. dropped more than 25% in the second quarter to just $1 trillion, according to Dealogic . M&A activity in the United States … [Read more...] about What the Business Cycle is Telling us About a Recession

Share to Twitter Share to Linkedin Topline Economists at S&P Global Ratings on Monday warned the likelihood of a recession over the next year is increasing as the Federal Reserve continues its most aggressive economic tightening cycle in decades—becoming the latest experts warning about the potential implications of rising interest rates, which help ease prices at the expense of economic growth. Key Facts In a research note published Monday, a team of economists led by S&P’s Beth Ann Bovino said aggressive Fed policy spurred by ongoing price spikes will usher in low economic growth this year and potentially risk a recession, defined as two consecutive quarters of negative gross domestic product. S&P forecasts that U.S. GDP will grow at an annual rate of 2.4% this year and 1.6% next year—down from forecasts last month calling for growth of 2.4% and 2%, respectively. Even the labor market, which has posted a remarkably strong … [Read more...] about Unemployment Will Rise And ‘Extreme’ Price Pressures Continue As Fed Hikes Risk Recession, S&P Warns

Share to Twitter Share to Linkedin Topline The Group of Seven nations (G-7) outlined plans for the reconstruction of Ukraine, resolving the global food security crisis, securing energy supply and tackling climate change as a two-day summit of the countries’ leaders in Germany concluded on Tuesday. Key Facts In a summary of its official communiqué issued after the summit, the G-7 reaffirmed its support for Ukraine’s “courageous” defense of its “sovereignty and territorial integrity” and vowed to punish Russia further by coordinating more sanctions and reducing its revenue from energy exports. The G-7 nations pledged a total of $29.5 billion in financial aid for Ukraine’s reconstruction in 2022, plans for which will be made in partnership with Kyiv through an international reconstruction conference. Blaming Russia’s invasion for steep energy prices around the globe, the leaders said they will take immediate steps to secure energy supply … [Read more...] about G-7 Pledges Billions To Help Ukraine Rebuild And Reveals Plan To Tackle Food Security As Summit Ends

- A + A WASHINGTON (June 28): US consumer confidence dropped to a 16-month low in June, as worries about high inflation left consumers to anticipate that the economy would slow significantly or even slide into recession in the second half of the year. Despite the gloomy outlook, consumers showed little sign of cutting back on spending, with buying plans for motor vehicles and other big ticket items like refrigerators and washing machines increasing, the survey from the Conference Board on Tuesday showed. But fewer consumers compared to April intended to go away on vacation at home or abroad, reflecting record high gasoline prices and expensive airfares. The economy is on recession watch as the Federal Reserve aggressively tightens monetary policy to tackle inflation. For now, it continues to grow, with other data on Tuesday showing the goods trade deficit again narrowing significantly in May as exports hit a record high. "Right now we are at an inflection point in … [Read more...] about Inflation saps US consumer confidence; house prices remain elevated

- A + A SINTRA/FRANKFURT (June 27): The European Central Bank (ECB) will activate the bond-purchasing firepower it has earmarked as a first line of defence against a possible debt-market crisis on Friday (July 1), according to President Christine Lagarde. Applying "flexibility" to how reinvestments from the ECB's €1.7 trillion (US$1.8 trillion) pandemic bond-buying portfolio are allocated is aimed at curbing unwarranted turmoil in government bonds as interest rates are lifted from record lows to curb unprecedented inflation. Net buying under a separate asset-purchase programme is also set to end on Friday — potentially exposing some of the eurozone's more-indebted nations to speculative attacks by investors. "We have decided to apply this flexibility in reinvesting redemptions coming due in the PEPP portfolio as of July 1," Lagarde said on Tuesday in a speech in Sintra, Portugal, where the ECB is holding its annual retreat. "We will ensure that the orderly … [Read more...] about ECB to activate first line of defence in bond market on July 1

Share to Twitter Share to Linkedin Cryptocurrencies are famous for their wild price swings, and in their short history, they’ve gone through multiple cycles of scorching-hot summers followed by frigid, long winters. The last downturn began in early 2018 and lasted about two and a half years. Over the past three months, with inflation spiking and recession concerns spreading, bitcoin has dropped from a high of $48,000 to roughly $21,000 . Today, some top investors think we’re in for another painful, extended period of low prices. “The next two years are going to be really rough,” says Avichal Garg, a managing partner at Electrical Capital, a crypto investment fund with more than $1 billion in assets. His fundamental views on the industry’s promise haven’t changed. “New software developers are coming in , and we're seeing more and more high-quality founders. We see Web2 executives from Facebook and Google coming in at a faster clip,” he says. But one … [Read more...] about The Crypto Bear Market Could Last Two Years, Top Investors Say

- A + A NEW YORK/BENGALURU (June 28): Bank shares boosted the Dow Jones and the S&P 500 indexes on Tuesday, as the big four lenders raised dividends following a stress test, but a sharp drop in consumer confidence brought to fore the risks from rising inflation. Wall Street's main indexes started the week on soft footing on worries of rising prices and an aggressive Federal Reserve dominated sentiment. Economic data remains at the forefront of investors' focus amid few market moving catalysts till the start of earnings season in two weeks. The Conference Board said its consumer confidence index dropped 4.5 points to a reading of 98.7 this month, as worries about high inflation left consumers anticipating that economic growth would weaken significantly in the second half of the year. Investors are now looking at data to determine whether the economy can withstand large interest rate hikes by the US central bank to stamp out inflation. "People are coming into … [Read more...] about Dow, S&P boosted by banks; cautious on consumer confidence data

- A + A (June 28): European Central Bank (ECB) president Christine Lagarde affirmed plans for an initial quarter-point increase in interest rates in July but said policymakers are ready to step up action to tackle record inflation if warranted. Speaking at the ECB’s annual retreat in Sintra, Portugal, Lagarde offered reassurances that a new anti-crisis instrument yet to be announced won’t stand in the way of tackling the fastest surge in consumer prices since the euro was introduced. Her remarks underline the ECB’s base case for normalising monetary policy as some officials float the idea of moving more aggressively. Governing Council member Martins Kazaks said earlier on Tuesday (June 28) that “front-loading” hikes, including a possible larger move next month, could be reasonable. Traders brought forward bets on rate increases, but only see a 25% chance of a half-point hike in July. “There are clearly conditions in which gradualism would not be appropriate,” … [Read more...] about Lagarde vows nimble ECB policy as July hike plan proceeds

Issues ranging from differences in the nature and availability of data in India and an uncertain global and domestic economic outlook loom as hurdles in the Reserve Bank of India (RBI) adopting a Federal Reserve -style “dot plot,” economists say. The dot plot is a chart that records each Fed official’s projection for the US central bank’s key short-term interest rate. The dots reflect what each thinks will be the appropriate midpoint of the Fed Funds Rate at the end of each calendar year three years into the future should the economy behave as they expect. "The dot plot is a good policy guidance to the market on what lies ahead and hence helps in minimising volatility,” Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, said. “However, in this highly uncertain environment when sources of inflation are mostly idiosyncratic and supply-led, a Fed-like guidance of three-to-four years does not seem feasible.” The debate on whether India should adopt a dot plot-like … [Read more...] about Can India adopt a Fed-style dot plot for interest rates? Not yet, say experts

Share to Twitter Share to Linkedin The talent revolution is in full swing, and even with threats of a recession, tech workers will still be in high demand. They have the skills companies need and the ability to shift jobs with ease. Many employers assume tech workers want remote work—and that offering the opportunity to work away from the office is the best way to attract them and keep them around. But this is a myth with only 18% of tech employees preferring remote work, according to a new study. What do tech employees really want? And how should their expectations inform the way employers think about creating work experiences for all of their people? The Influence of Tech Tech workers are a great place to start in considering the work experience, because tech is a significant sector of the economy, and it is therefore influential for many other areas of work. In fact, according to data sources , the tech industry is the second biggest driver of the … [Read more...] about Think Tech Workers Want Remote Work? Think Again: 5 Ways To Respond