A Recession is Now Unavoidable and the Stock Market has NOT Priced-in This New Reality.
The developments of the past week mean we cannot avoid a recession. At almost 18x earnings (& earnings forecasts set to fall even more), today's stock market has not come even close to pricing-in a recession (even if we avoid a banking crisis).
- Why is Elon Musk so quiet?
- Credit Suisse has something SVB did not…a big derivatives book.
- Even if we avoid a banking crisis…and even if inflation comes down…we’re not going to be able to avoid a recession. A recession will mean even lower earnings…and THAT means this expensive stock market needs to get a lot “less expensive.”