The "R" Word is Coming into Picture - Recession, Upcoming Earnings, and FOMC this Week

The Economic Market Cycle is Changing

I’ve recently been pounding the table on how inflation is transitory and if the Fed does move forward with its tightening, it can create a lot of issues in both the financial markets and our economy. The reason why; inflation was predominately created from government stimulus and over stimulating consumer demand and cutting expenses. More detail can be found here:

Inflation is showing strong signs of abating and consumer inventories were likely pulled forward from 2021. Unbelievably, you’d think an asset manager down over 50%+ from highs would forever be wrong. However, Cathie Wood had a hypothesis where “inventories are likely with the consumer” is now coming to fruition and likely to surface this week with earnings, specifically forward guidance. There is no place where this thesis is more apparent than Peloton.

This publication will be for members as I share data and leading indicators that are supporting an economic slowdown and a potential back down from the Fed when it comes to QT/Rate Hikes in the coming months. Thesis organized as follows:

• Leading indicators and data points that support a recession

• Earnings this week and potential for weak guidance

• FOMC meeting this week

• Secular trend perspective