📉 Fears of a recession have spiked to levels similar to 2022, fueled by concerns about economic weakness, but these fears may be exaggerated.
📊 Key indicators, such as initial jobless claims and corporate profit margins, do not currently show the typical signs of an imminent recession, unlike previous periods of economic downturn.
🤔 The market may be prematurely pricing in a recession, potentially creating a buying opportunity similar to what occurred in late 2022, when the market rallied despite widespread recession predictions.
@bernardodegarcia:
“The thesis that we are facing a possible market bottom is also reinforced by the evolution of the VIX, the volatility index. As you are seeing, it is quite simple to understand. It goes up, up, up, the market falls, and right now, the VIX seems to be starting to come down and normalize again towards a level of 15. Perhaps there are also capital outflows from funds, which tend to be concentrated during moments of peak fear and moments of capital rotation to see if this time is different. We will have to watch whether the Fed tightens its policy again or not, and especially how Trump’s tariff dispute evolves, which could hurt margins in 2025. But for now, as we said, well, many analysts suggest that, I don’t know, the recession has been renounced again but not confirmed. In other words, the market is discounting a very pessimistic scenario that does not quite match the health of employment and corporate profits.”
Watch the exact part of the video where @bernardodegarcia talks about the S&P 500 here:
View the video on YouTube.
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