Michael Berman, PhD
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In this chart I show the before and after of the last 13 recessions in the US.
The official start of the recession is where the grey vertical line intersects the 0 point on the x-axis. What people often forget is that this official announcement of when the recession starts happens around 180 days after the recession in fact starts.
I have therefore added a red vertical line when the actual announcement takes place. What you can see with the black line is the average performance of the S&P 500 trends down until the announcement of the recession and then starts to, in fact, trend upwards from the time of the announcement.
The time to be short or underweight stocks is before the announcement is made and long when the announcement is made.
Why am I saying all of this?
Global trade, especially between the US and China, has fallen off a cliff. Of course you are not seeing this fall in the reported earnings and economic releases; that is because there is a lag effect. Don’t say you haven’t been warned. You need to take action with the lag effect in mind; don’t react to the news of the day.
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This is not financial advice. I have not considered your individual circumstances. I propose actionable insights from a hypothetical general global macro strategist's point of view, trying to achieve above-average risk-adjusted returns whilst considering the major macro themes currently in play. I am not licenced to provide individualised financial advice; therefore, any investment decision you make is solely your responsibility.
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GBP/USD turns positive around 1.3370
GBP/USD picks up renewed pace on Tuesday, leaving behind earlier daily lows near 1.3330 and refocusing on the 1.3360-1.3370 band amid a mild bearish tone in the Greenback. Meanwhile, investors continue to assess the recent Moody’s downgrade of US rating ahead of key UK inflation data on Wednesday.
Gold accelerates its advance, retargets $3,300
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Bitcoin fails to reach all-time high despite building institutional and state support
Bitcoin price stabilizes around $105,200 on Tuesday, just 4% shy of its all-time high at $109,588. JPMorgan CEO Jamie Dimon says the bank will let clients buy Bitcoin.The Texas House is set to conduct a second reading of a bill that, if passed, would establish a Bitcoin Reserve.
China April slowdown shows the impact of economic uncertainty
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