Are we in a recession?

Question

I looked at market prices today and everything is telling me we are about to enter a recession.  Citi is the worst bank but still about earning $7 a year and 8 pe now....all banks doing poorly.  Industrials crushed.  Apple around 13 pe ex-cash.  Rates implying cuts in 18 months.  Utilities and health care doing well for sell off.

Then I look at real world things.  Close to 200k jobs created.  Art Basel is booming and people are spending.  Mba grads getting 160k median salaries.

The data doesn’t seem to fit the world.  Whose wrong?

sonibubu · Accepted Answer

Technically you need 2+ consecutive qtr of GDP growth  0, so not there yet but Trump is trying his hardest to get us there.

The market is actually very good at pricing in a recession, a la 2007. The yield curve is telling us we're close. Housing is a good read as well, and starts are down.

So yeah, not there yet but I think late 19 or by 2020 we will be in a recession. It's just a matter of how bad will it be.

Mostly Random Dude · Answer

"traderlife"
The data doesn’t seem to fit the world.  Whose wrong?

To add some additional points, international credit(ish) markets are not looking healthy either, xCCy basis is wider, sov spreads are wider.  EM equities are getting destroyed, China included. All of this has benign explanations, obviously. On the other hand, many of the usual pain points are looking pretty tame.

The data is backward looking. The market is forward looking. So either the markets perception is wrong (and it frequently is) or we are on the precipice of some economic turmoil.

+17	Starting HF career at a New / Small Fund	11	3h
+10	Silver Point	4	15h
+10	Citadel - Case Study	5	10h
+9	Thoughts on Castleknight?	7	2d
+9	Do you think the industry gets more and more specialized over time across both MM and SM space?	3	1d
+8	Why are there fewer and fewer credit HFs in the market?	1	3d
+7	Hedge fund lingo	3	6d
+6	Can I rock a beard in the HF world?	5	13h
+3	Andrew Left convicted of stock manipulation, does this affect activists/short sellers going forward?	2	1d
+2	Life in West Palm Beach	7	17h

1	redever	99.2
2	Secyh62	99.0
3	kanon	99.0
4	BankonBanking	99.0
5	CompBanker	98.9
6	Betsy Massar	98.9
7	DrApeman	98.9
8	dosk17	98.9
9	GameTheory	98.9
10	Jamoldo	98.8

Elite Career Bootcamp. Top Job Offer Guaranteed.

Elite Career Bootcamp. Top Job Offer Guaranteed.

Are we in a recession?

Elite Career Bootcamp. Top Job Offer Guaranteed.

Elite Career Bootcamp. Top Job Offer Guaranteed.

Are we in a recession?

Trending Content - Hedge Fund Forum