Stock Market Crash: Expert Warns Recession Coming Despite Optimism

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'I've seen this show before': A renowned market bear who called the dot-com bubble warns a recession is still barreling toward the US economy — and stocks are due to suffer as misguided optimism fuels the rally

The S&P 500 is up 15.2% year-to-date, fueled by gains in the tech sector.There's a fairly simple way to characterize Societe Generale strategistBears are boys who cried wolf , and investors are the shepherd who have become sick of the ongoing warnings and have stopped heeding their calls. But in the end, the wolf is still coming for their sheep.

"The US tech sector has surged on the back of what may prove to be nothing but hope – mainly AI related. Actual earnings are poor in absolute and relative terms," Edwards said."Yet the sector is again over 30% of total market cap. Of all the strange things I have seen over the years, that looks simply nuts."All of this optimism is likely a mistake, Edwards said as he doubled down on his recession call.

According to the Bureau of Labor Statistics, the US economy added 209,000 jobs in June, below economists' expectations of 225,000. That was the first time in 14 months it surprised to the downside, according to Global X Portfolio Strategist Michelle Cluver. While the jobs numbers don't give immediate insight into where the economy is headed in the months ahead,. They include the inverted Treasury yield curve, manufacturing activity, consumer intentions, credit availability, and stock-market breadth.

He added that the US has avoided a recession so far because household balance sheets are strong, the real fed funds rate has only recently turned positive, and the economy is less prone to cyclicality, among other factors.recent column for Insider

 

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