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SPY - GDP data, Recession Looming? 💀
Hi Traders, Investors and Speculators
Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year.
This week is the final week of trading for July and perhaps the most important week of the summer — with the Fed meeting, GDP data and earnings from almost a third of the S&P 500 on deck. Many investors, entrepreneurs and speculators (including myself) are worried about the potential of an economic recession and are hoping this week’s news storm will help direct their expectations and provide some clarity.
According to Sam Stovall, the chief investment strategist at CFRA Research, most investors believe that Thursday’s GDP report will show a second quarter of decline, which is the unofficial signal of recession. It is his opinion that the Fed will most likely announce a 75-basis-point rate hike on Wednesday.
Consumer index shows that consumers are extremely pessimistic, but they're spending more than they did last year. The number of jobs is recovering, but economic output is slowing sharply.
This is causing a debate among policymakers and investors about whether the United States is close to, or already in, a recession — and if it isn't, whether persistent anxiety about one could be enough to make it a reality, as nervous businesses and consumers start to pull back. Could people "anticipate" the economy into a recession? US Commerce Secretary Gina Raimondo said earlier in July that she does not believe a recession is on the cards. Treasury Secretary Janet Yellen said Sunday that we are definitely not in a recession but "...we're in a period of transition in which growth is slowing."
Former US Treasury Secretary Larry Summers (during an interview with CNN) espoused a different view — focused not on what the data is currently showing, but on what's likely to happen next.
He stated that he believes a recession is most likely, stating : "When we've been in this kind of situation before, recession has essentially always followed."
His concerns lies with the Federal Reserve. The central bank is rapidly tightening interest rates to throttle inflation, but a sharp pullback in economic activity as it boosts borrowing costs.
While the Fed is hopeful it can engineer a "soft landing," where inflation comes down without a recession, Summers said he is skeptical. He mentioned that when inflation has been high and unemployment has been low, soft landings represent a kind of hopium.
The final word: One definition of a recession is when the economy experiences two consecutive quarters of negative gross domestic product. In the first three months of the year, output declined at an annual rate of 1.6%. That raises the stakes for Thursday's first look at GDP data for the second quarter. The recession call that economists and policymakers watch for, however, comes from the National Bureau of Economic Research's Business Cycle Dating Committee. They define a recession as "a significant decline in economic activity that is spread across the economy and that lasts more than a few months."
In a recent blog post, the White House said that even though some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle.
So don't expect the NBER to settle the back-and-forth debate on recession any time soon. It waited until June 2020 to announce that the coronavirus-induced recession started the previous February — and that was faster than usual. That means the recession debate is likely to persist for many months, no matter what's revealed later this week.
If you're looking for an easy to understand guide on Wyckoff Method and phases, check out this Bitcoin idea:
If you're looking for more info on Stop Hunting and algorithm trading, check out this idea on Cardano:
To know the macro phase is to have power - this will eliminate fear and greed, and cancel out the noise you hear from news and paid "influencers".
_________________
👀Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 📉
Hit like & Follow 🔔
We thank you for your support !
CryptoCheck
Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year.
This week is the final week of trading for July and perhaps the most important week of the summer — with the Fed meeting, GDP data and earnings from almost a third of the S&P 500 on deck. Many investors, entrepreneurs and speculators (including myself) are worried about the potential of an economic recession and are hoping this week’s news storm will help direct their expectations and provide some clarity.
According to Sam Stovall, the chief investment strategist at CFRA Research, most investors believe that Thursday’s GDP report will show a second quarter of decline, which is the unofficial signal of recession. It is his opinion that the Fed will most likely announce a 75-basis-point rate hike on Wednesday.
Consumer index shows that consumers are extremely pessimistic, but they're spending more than they did last year. The number of jobs is recovering, but economic output is slowing sharply.
This is causing a debate among policymakers and investors about whether the United States is close to, or already in, a recession — and if it isn't, whether persistent anxiety about one could be enough to make it a reality, as nervous businesses and consumers start to pull back. Could people "anticipate" the economy into a recession? US Commerce Secretary Gina Raimondo said earlier in July that she does not believe a recession is on the cards. Treasury Secretary Janet Yellen said Sunday that we are definitely not in a recession but "...we're in a period of transition in which growth is slowing."
Former US Treasury Secretary Larry Summers (during an interview with CNN) espoused a different view — focused not on what the data is currently showing, but on what's likely to happen next.
He stated that he believes a recession is most likely, stating : "When we've been in this kind of situation before, recession has essentially always followed."
His concerns lies with the Federal Reserve. The central bank is rapidly tightening interest rates to throttle inflation, but a sharp pullback in economic activity as it boosts borrowing costs.
While the Fed is hopeful it can engineer a "soft landing," where inflation comes down without a recession, Summers said he is skeptical. He mentioned that when inflation has been high and unemployment has been low, soft landings represent a kind of hopium.
The final word: One definition of a recession is when the economy experiences two consecutive quarters of negative gross domestic product. In the first three months of the year, output declined at an annual rate of 1.6%. That raises the stakes for Thursday's first look at GDP data for the second quarter. The recession call that economists and policymakers watch for, however, comes from the National Bureau of Economic Research's Business Cycle Dating Committee. They define a recession as "a significant decline in economic activity that is spread across the economy and that lasts more than a few months."
In a recent blog post, the White House said that even though some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle.
So don't expect the NBER to settle the back-and-forth debate on recession any time soon. It waited until June 2020 to announce that the coronavirus-induced recession started the previous February — and that was faster than usual. That means the recession debate is likely to persist for many months, no matter what's revealed later this week.
If you're looking for an easy to understand guide on Wyckoff Method and phases, check out this Bitcoin idea:
If you're looking for more info on Stop Hunting and algorithm trading, check out this idea on Cardano:
To know the macro phase is to have power - this will eliminate fear and greed, and cancel out the noise you hear from news and paid "influencers".
_________________
👀Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 📉
Hit like & Follow 🔔
We thank you for your support !
CryptoCheck
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