US recession will be mild, AI craze will prop up stocks: strategist

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Recession will strike and stocks will drop - but the declines won't be half as bad as some fear, leading strategist says

The US will slump into recession and stock prices will slide in the months ahead — but the downturn won't be nearly as dire asThe American economy is likely to shrink slightly in the fourth quarter of this year, then suffer a larger contraction in the first quarter of 2024, Seema Shah said during aHowever, Principal Asset Management's chief global strategist forecasted an economic recovery starting in the second quarter of next year.

Shah suggested unemployment could rise from 3.7% today to 4.1% by the end of this year, meaning only a small percentage of the US population will lose their jobs and suffer a serious blow to their finances. While stocks normally drop during a recession,"throw in the tech side and actually everything goes completely out the window because the math doesn't just doesn't add up," she said.

Household savings have held up better than expected in the face of rising prices and steeper debt repayments, and consumers and businesses owe less debt today than in years past, she said.

 

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