Recession threat is rising as earnings roll over, market bear David Rosenberg warns

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Wall Street bear David Rosenberg sees evidence of a 'significant growth turndown' in earnings (via CNBCFuturesNow)

But the robust levels are not deterring Rosenberg's bearishness.

"The stock market peaked on October of 2007 and the recession started two months later," he said. "This is one of these rare periods where earnings are coming down, earnings estimates are coming down and the stock market is just rocking and rolling because it's really a momentum liquidity and central bank driven market."that the economy was on a collision course with a recession, wants investors and the Federal Reserve to view the downturn risks more seriously.

"Companies ahead of time typically trim their estimates. They lower the bar, and that's why every single quarter you're thinking 'oh, like 80% of the companies are beating their estimates.' Well, because they've already lowered," said Rosenberg."It's so difficult to time," he said. "I was of the view it may have been starting already."

Despite the delay, Rosenberg is confident trouble is on the horizon even if the Federal Reserve satisfies the Street consensus of a quarter point interest rate cut later this month and helps drive the historic stock market rally to new highs. "A couple of years ago, I started getting more nervous. I'm pounding my fist on the table more now," Rosenberg said.

 

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