🤔Will Powell Pause Rate Hike To Prevent 🇺🇸 From Entering Into A Recession & How Do We React🤨❓

LMSunshine
2023-01-31

Yesterday(30/1), I shared with you that the Bank of Canada🇨🇦 made the following announcements on 25/1(Wed):

(1) Another 25bps hike to 4.5%, the highest level in 15 years🔥🥵🔥

(2) Likely hold off on further increases for now🧯🔥

(3) Canadian economy is going to stall & could tip into a recession during the 1st half of the year🙈🙉🙊 bringing inflation down to about 3% at mid-year & back to 2% in 2024.

Today, let’s look at whether economists think 🇺🇸 will head into a recession. Economists predict a 70% chance of recession this year but cannot agree on:

(1) when it will start,

(2) how long it will last, or

(3) how severe it will be.

Here is a summary of what economists from 10 financial institutions think:

Powell on the other hand still thinks that a soft landing is possible. Let’s see how his speech🎤 has changed over the months. In Sep, he was adamant about bringing inflation down to 2% & shared that a soft landing is very challenging ➡️ The market hit a new bottom in Sep-Oct.

In Nov, Powell was still adamant about bringing inflation down to 2%😅 but agreed that the chance of a soft landing has narrowed but is still possible ➡️ The Nasdaq hit a new bottom in Dec & the S&P 500 gave up some of its gains.

In Dec, Powell was still adamant about bringing inflation down to 2%😅 & shared that interest rates will rise above 5% in 2023. What he shares in the press conference in Feb will definitely have a Big Effect on the market again although we won’t know how the market will react until he speaks🤷🏻‍♀️📈/📉

🧐Will Powell Pause Rate Hike To Prevent 🇺🇸 From Entering Into A Recession❓

🤔💭: I think the Fed will pause rate hike after hitting the projected terminal rate of 5.1% so as to meet the 2% inflation🎯 He will likely give some clues in the press conference🎤 so do stay tuned for it fellow 🐯🐯🐯 Let’s make wise investing decisions based on what Powell says & not rush into FOMO buying or Panic-Selling💪💪💪

🧐Who’s Right About The Recession-Economists OR Powell & How Do We 🐯🐯🐯 React❓

🤔💭: Both Economists & Powell have been wrong before😅 Well, they’re humans & humans make mistakes, so we won’t know who’s right until months later. However, we 🐯🐯🐯 can still prepare for either scenario. We can:

(1) Limit risks by doing swing trades (short holding period) using companies with strong fundamentals to avoid being “stuck” in the red if & when the recession hits❣️

(2) DCA on index-based ETFs for the time-being so that we don’t have to ⏰ the market since the market will eventually rise after the recession & gains will be made then❣️

(3) Buy recession-proof stocks❣️

➡️ Typically, recession-proof stocks are in industries that people can’t or won’t go without. Examples of essential & ethical recession-resistant stocks include:

🎖Consumer staples, like grocers, food & beverage makers & wholesale stores

🎖Shipping & transportation

🎖Utilities

🎖Healthcare

🎖IT, communication & digital service firms

➡️ Some business models are also uniquely designed to capitalise on declines, such as discount retailers/repair shops. During economic declines, customers may look for ways to slash their grocery bills, such as shopping at Walmart & Dollar Tree or buying less ‘branded’ goods & repairing tech & cars rather than buying new models. When eating out, fast food like Wendy’s & McDonald’s might also be recession-proof because people still want to eat out when times are tough but where they eat may have to change😉

$McDonald's(MCD)$ $Starbucks(SBUX)$ $Wal-Mart(WMT)$ $Costco(COST)$ $Target(TGT)$ 

What are your thoughts about the above fellow 🐯🐯🐯❓Do share them with me in the comments section & please help to click on the “Like” & “Share/Repost” buttons at the Bottom Right corner so that more 🐯🐯🐯 can access this information, many thanks🤗🥰 You will Greatly Encourage Me❣️

Follow me if you enjoy reading my analytical stock research🔍 presented in a fun & easily understandable way😉

As usual-🤔💭 Consider POV & Actions of investors + 👩🏻‍💻👨🏻‍💻 Research + 🗑FOMO & Greed = Investing Wisely 🤓🤗 + Accumulating Wealth 💵💰

@TigerStars @CaptainTiger @MillionaireTiger 

How to Interpret Powell's Testimony?
Federal Reserve Chairman Jerome Powell is scheduled to testify before Congress on 7th and 8th March. Powell on Tuesday cautioned that interest rates are likely to head higher than central bank policymakers had expected. The stock market plunged after his speech. Some investors argue that the market is over-reacting. --------- [Topic] How do you interpret Powell's testimony? How do you expect Powell's testimony tonight? How will the testimony affect rate hike expectations?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • boardy
    2023-02-01
    boardy
    Great article. I'm picking it will be over faster than people actually are thinking currently so recession exposed stocks might be a good steal.  Assuming they recover quickly and reset to the next phase earnings potential.
    • LMSunshine
      Thanks❣️Agree on buying low for the recession exposed stocks😉
  • Meet0
    2023-02-01
    Meet0
    Randall 10 hours ago Neutral Forget the McRib!! Bring back the "angus" burger and all day breakfasts!!!! Do it now MCD CEO; that is a direct order from me!!!!
  • DIMCO
    2023-02-01
    DIMCO
    Blowout quarter. Higher prices will be better for profit margins with the increased traffic
  • Guy
    2023-02-01
    Guy
    Another 25bps hike will not make market down again.
  • FrankRebecca
    2023-02-01
    FrankRebecca
    What will be soft landing be? just curious.
  • MGOH
    2023-02-02
    MGOH
    Ok
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