David Rosenberg: Bear market and recession calls remain in place despite the rally

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The stock market is up but we remain in a bear market, argues David Rosenberg. Read more

I really don’t like what I see: the economy is weaker than generally perceived in the media and by Wall Street commentary while the equity market has been breathing the fumes of FOMO complacency and speculative fervour.

All those prior worries of the ongoing Fed tightening campaign, the Russia-Ukraine war, the U.S.-China economic conflict, the lack of a growth impulse from the short-lived China reopening trade, elevated recession risks and aAnd while market breadth still isn’t great, it has begun to improve. Although theof 0.6 per cent last week , closing below its 10-day trendline, the small-cap Russell 2000 climbed 1.5 per cent, closing in on 2023 highs as well.

More American consumers also are falling behind on their loan payments and the trend in business bankruptcies is on the rise, though not yet reflected in tight credit spreads. The I’m sure if things were as “Goldilocks” as the narrative suggests, we wouldn’t have seen billed business, a key measure of American Express Co. spending growth, get cut in half to an eight-per-cent year-over-year trend in Q2 from 16 per cent growth in the first quarter and below the growth analysts had expected . The company is the poster child for the leverage that has been supporting the economy of late, even as the lagged effects of the prior fiscal stimulus have been fading.

 

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David Rosenberg: Bear market and recession calls remain in place despite the rallyThe stock market is up but we remain in a bear market, argues David Rosenberg. Read more
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