MFG July 2022 Comments

‘We are in a Recession’ Dr Jeremy Stiegel Professor Wharton School of Business. CNBC July 8, 2022.

 Federal Reserve Bank of Atlanta GDP Now concurs and says ‘2nd quarter GDP declined 2.6%’. This will be the second quarter of a ‘contraction’ and creates a ‘technical Recession.’

 ‘Recession’ should be making the newspapers later this summer.

 So, I might be correct that we are not ‘heading for Recession, we are in a Recession.’ May 15, 2022

 So now what?

 Is the ‘US Unemployment rate actually 3.6%’? WSJ July 8, 2022 page 1

 Well, with only ‘62% participation of likely employable people’ (St Louis Federal Reserve 7/11/22), there appears to be 2-3 million people NOT participating and another 4.5 million people counted as Unemployed. 7 million people need or will soon need a job.

 Thus, why the US added 372,000 new jobs in June and the Unemployment Rate did not change from 3.6%

 If the trend continues, the people coming back into the labor force look to be a bright spot!

 What about inflation?

 Since June 1, 2022, ‘commodities including oil have fallen 15%’ MarketWatch July 10,2022. Inflation abating?

 Perhaps a bright spot.

 The St. Louis Federal Reserve forecast (July 10,2022) is for ‘inflation to retreat to under 3% by the end of 2023.’

 If true, this would be a very bright spot.

 Over the past year, ‘US Company Earnings have climbed 42% and stocks have fallen over 10% S&P 500 and 20% NASDAQ. Earnings are expected to climb 25% over the next year.’ WSJ July 10, 2022 page E8.

 If true, another bright spot.

 Interest rates are…coming down as Doug Cote, CIO Voya argued two months ago?

 ‘30-year US Mortgage Rates have fallen from 7% in the spring of 2022 to 6.3% today.’ Bankrate 7/11/22

 I believe Doug Cote, looks to be correct so far.

 But there are risks!

 Yes, the COVID virus continues, but with a much lower mortality rate.

 Yes, the War in the Ukraine continues with no particular end in sight. However, the War remains contained.

 So, like after a big Minnesota Snow storm drops a couple feet of snow, we might be plowing out of this Recession soon. Maybe we don’t need sunscreen anytime soon. However, the snowfall looks to be ending.

 ‘When everyone is greedy – be fearful. When everyone is fearful – be greedy.’ Investment advice from Billionaire Warren Buffett.

 Enjoy the rest of your Summer 2022!


Disclosure: The information and opinions presented here are those of Wade McFee and are for general information only and are not intended to provide specific advice or recommendations for any individual. The opinions, views and information expressed in this commentary are subject to change without notice based on market conditions and other factors. You should contact your investment representative, attorney, accountant or tax advisor with regard to your individual situation

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