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 💵💰
Comments