USCTrojanCPA said:Something has to cause the recession. In my mind, the biggest risk that would cause a recession is the Fed moving up rates than expected and/or 10-year & 30-year bond rates heading over 4%. That being said, I just don't see that in the near term. I spoke to all my clients about their businesses and how the companies that they are working at are doing, from what I hear things are going well....increasing business/profits, good raises/bonuses, lot of new job opportunities/higher staff turnover, higher stock prices, etc. The new tax bill won't cause a recession and should be more of a tailwind for businesses.
For exactly those reasons a recession might be caused . How ?
Notice that whenever these things happen in synchrony - raises , profits , tight labor market , etc - they don't last for a long time -- go back to the 90s , 2000, or 06-7 .
And business leaders are the last ones to call a recession - they bow in to peer pressure and jump in to expand capacity , raise hiring , or wages at exactly the same time , with the result that when demand softens , everyone is caught w their pants down at the same time.
for a CEO, or mgmt team, being wrong w the herd is never a bad thing for future job prospects than being wrong individually - hence everyone peaks at the same time.
From my experience dealing w mgmt teams and business owners for decades , NEVER ever rely on them to call a recession. But they are generally very good at predicting recoveries (and their timing) after a recession.
The best prospect for a stock price stability is that there is a short base (people who are short the stock) that are ready and willing to cover when the stock goes down . when all the shorts have thrown in the towel , it is then you have to be really concerned as to who will provide the bid the way down
I have no absolutely no idea when the next recession will come. But what is happening now (and say the next 10-12 months) is generally a good precursor to that event .