The chances of the U.S. economy being in, or going into a recession are very high here.
A recession is defined as two quarters of negative GDP growth.
1. 1st Quarter 2022 GDP came in at -1.6%.
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2. The Atlanta Fedeal Reserve Bank is projecting another negative quarter in Q2.
3. The most recent weekly economic reports show that both the U.S. consumer and U.S. companies are pulling back.
- For May 2022, PCE inflation M/M rose from 0.2% to 0.6%.
- Core PCE M/M stayed the same, PCE Y/Y stayed the same. Core PCE Y/Y dropped from 4.9% to 4.7%.
4. The Federal Reserve Open Market Committee (FOMC) is on an aggressive tightening path.
- The Fed Funds target rate is 1.50 to 1.75 currently.
- The Fed Funds futures market is pricing in a 49.3% chance of the FF rate being at 3.25 to 3.5 by 12/14/22, which would indicate more Fed rate hikes on the way.
- Although the incoming economic data could change the probabilities, rates will likely be higher over the next few months, which is designed to slow the economy.
5. ASSUMING THAT WE ARE IN OR WILL GO INTO A RECESSION AT SOME POINT SOON…
HOW DO YOU PROTECT CAPITAL AND HOW DO YOU PROFIT?
Blue Chip Daily successfully alerted our Members to the following:
- That we were selling high growth stocks in Q4 2021, helping our subscribers avoid 50-80% declines.
- That we moved to over 50% cash at the end of February 2022, avoiding most of the S&P 500 and Nasdaq 100 drawdowns.
- We made energy our top ranked sector for 2022 and booked triple digit gains in the sector.
- We also alerted Members that we were booking gains and closing our energy positions two weeks ago, before a major drawdown in the sector.
- I have been discussing with our subscribers on a daily basis over the last 6-8 weeks that aggressive rate hikes from the Fed would slow the economy down and we have been positioned correctly going in.
- Our Best Market Calls – 2022 – Blue Chip Daily Trend Report
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- Top 3 sectors and markets to focus on here to profit.
- Top 3 sectors to avoid.
- My top-down views for the S&P 500, Nasdaq 100, bond markets and energy markets.
- How to know when the cycle shifts.
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