In this week’s On My Radar, we assess global and U.S. recession probabilities. Why? In recessions, equity markets take the most severe hits (think -30%, -40% to -60% or more).
I’m on record saying that the risk of a U.S. recession in 2017 is high. I hold this view due to the quarter-over-quarter decline in corporate earnings and the length of the current business cycle (simply, it is aged). We tend to get one to two recessions every decade. The last was in 2008.
Further, the higher the valuation, the further the equity market will fall when recession strikes. So we keep it on our radar. I share several of my favorite recession prediction indicators in this next section. In short, I see no immediate signs of recession.READ MORE