Jan 9, 2023
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Barry Knapp of Ironsides Macroeconomics rejoins the podcast to
discuss his surprisingly sanguine view of the economy in 2023: Why
cyclical stocks should outperform the technology and defensive
sectors, and why he's expecting inflation to drop to 3.5% by the
second half of the year.
- Inflationary recessions are different from deflationary ones.
The last four were the latter. If there is a recession this year,
it will be the former (02:18);
- Earnings downside is limited in this scenario, by 5% based on
what happened in similar situations in the past, and earnings
should actually go up (5:56);
- Tech margins should continue to be under pressure but
economically-sensitive cyclical stocks should see margin expansion
- The US labor market has actually started to weaken considerably
-- and not due to Fed policy (12:18);
- There have been some big adjustments in the labor market
- The 'wealth destruction effect' from tech stocks selling off is
- One point of concern: the deficit. This is where the implosion
in wealth could affect things (32:59);
- The coming budget battle in Congress is worth paying attention
- The 'higher for longer' Fed interest rate hike thesis has
gained traction. What this means for stocks (43:27);
- Inflation: Expect 3.5% CPI by mid-year (47:37).
More Information on the Guest
Not intended as investment advice.