Quote:
Originally Posted by CoachKandSportsguy
Recession impact
Odds of recession = 50 : 50 right now, not zero, and i would estimate much higher than that, but lets start with even.
Recession means negative earnings growth . .
Recession means lower earnings multiplier.
Take the lower earnings numbers and put a lower earnings growth multiple and you can easily get an SnP500 index number which starts with a 4, and at the extreme, which would be 100% all in time to buy, an index number which starts with a 3.
The kick when down would be if the foreign buyers don't buy the US treasuries as they have in the past with the current low interest rates we have right now. . The treasury may have to increase interest rates to sell the bonds to foreigners. .
That is the risk right now for the US economy. . . growth can't be financed cheaply any more. MMT might just be an academic theory which doesn't scale in the real world.
Which means that the bond market, with interest rates which have been in a down trend for 40 years, can't continue to have interest rates in a down trend any longer, after it reached near zero during the pandemic.
So a balanced portfolio with stocks and bonds may not have an increasing value. . that is the current risk. . . doesn't mean it will happen, just means that the odds/probability of it happening are higher. .
good luck to us. .
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Dow up 3k on 4-9. Dropped again 4-10 in the AM by around 800. Tariff impact still not known and too many people out there who can't spell economy and believe everything they hear from their favorite news source.
At least now the good CEO's will/should earn their pay in order to plan out the uncertain future. How many children/s toys are made in China and what will they cost when they reach the US?