Animal Spirits: Invest in What You Know

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Recessions have not been "redefined."https://t.co/R42GCfU1An

This is such an FAQ that I asked it when I first became a financial reporter in 1987.

I got the same answer 35 (yes, thirty-five) years ago. pic.twitter.com/Ig5j3EYtA5
— Jason Zweig (@jasonzweigwsj) July 27, 2022

Given all the discussion this week, I thought it'd be interesting to look back at the one example we have of a two-quarter contraction in G.D.P. that was *not* labeled a recession by NBER: Q2 and Q3, 1947.
— Ben Casselman (@bencasselman) July 27, 2022

Rare to see: Fed is actively hiking rates (blue line) while GDP is contracting (bottom) … typically in prior recessions (red bars), Fed has been cutting rates as GDP has declined pic.twitter.com/nmrYG3TBc0
— Liz Ann Sonders (@LizAnnSonders) August 1, 2022

“No Recession In Today’s #GDP Indicators.” - @yardeni pic.twitter.com/rRGQJFsWJD
— Carl Quintanilla (@carlquintanilla) July 27, 2022

B of A: “The recent debate about whether the US is already in a recession is a distraction. Rip roaring payroll, strong GDI and strong final sales all suggest ‘recession’ is still a forecast, not a reality.” [Harris] pic.twitter.com/kuKQ9ry8De
— Carl Quintanilla (@carlquintanilla) July 29, 2022

Fun facts: In the first six months of the 1981-82 recession, we lost 1,046k jobs, in the first six months of the 1990-01 recession we lost 690k jobs, in 2001 we lost 761k jobs, in 2007-09, we lost 705k jobs. In 2022 we gained 2,740k jobs.
— Dean Baker (@DeanBaker13) July 29, 2022

Durable Goods Orders in the United States increased 1.90 percent in June of 2022 over the previous month. https://t.co/G4gyxTou0U pic.twitter.com/JDEbwTcNA6
— TRADING ECONOMICS (@tEconomics) July 27, 2022

Stepping back from the ultra high frequency debates this picture from @WSJ is a great reminder of just how much better economic policy has gotten over the last eighty years compared to what came before. Both better understanding and institutional progress. https://t.co/RBlb89Z6hT pic.twitter.com/X9p5CLn46I
— Jason Furman (@jasonfurman) July 30, 2022

10-year Treasurys recorded the biggest one-month yield decline since **March 2020**--Dow Jones Market Data.

At 2.642% today
— Gunjan Banerji (@GunjanJS) July 29, 2022

Of the 86 prior days where the Nasdaq rallied 4%+, nearly half occurred from 2000 to 2002. pic.twitter.com/fW59tPf61T
— Bespoke (@bespokeinvest) July 28, 2022

The S&P 500 gained 3.9% on the day of the Fed hike and following day.

That is officially the best rally after a hike going back to 1970 (Bloomberg data).
— Ryan Detrick, CMT (@RyanDetrick) July 28, 2022

5. There has never been a recession without a 4Q GAAP EPS decline. In most recessions, Y/Y EPS growth has ⬇️ <-20%.
That's critical because the market tends to⬆️ faster when EPS growth is ⬇️(markets anticipate reversals), EXCEPT when EPS growth has been <-20% (SPX -9.8% GPA). 5/5 pic.twitter.com/5NN7K5yAcW
— Ed Clissold (@edclissold) July 25, 2022

S&P 500 2023 EPS expectations falling off a cliff. pic.twitter.com/5rgLtWGo0V
— Gina Martin Adams (@GinaMartinAdams) July 29, 2022

Proceeds from IPOs of technology companies have amounted to $512M, down from $58.7B last year.
— Ryan Petersen (@typesfast) July 27, 2022

mortgage rates have been exceptionally volatile in 2022.
so far this year the standard deviation of the weekly change in the 30-year FRM is 18 basis points, highest since 2008 and third highest in the past half century pic.twitter.com/BlgX03CU7I
— 📈 Len Kiefer 📊 (@lenkiefer) July 29, 2022

Incredible story. Tiger Global-backed start up MissFresh just told staff its run out of money. At same time, unpaid suppliers have occupied its offices in protest. Reminder: was listed at $3bn valuation last year - in @FT https://t.co/Sfp4OK3wEy
— Murad Ahmed (@muradahmed) July 28, 2022

$AMZN pic.twitter.com/FoPH59IOAF
— Alex Morris (TSOH Investment Research) (@TSOH_Investing) July 28, 2022

Meanwhile….

The median real revenue growth for the FAANG stocks has officially turned negative for the first time in almost 2 decades. pic.twitter.com/CAUP6VZQU7
— Otavio (Tavi) Costa (@TaviCosta) July 29, 2022

Give those mega caps a ribbon!

This earnings season is on pace to be the first time since at least 2015 that AAPL AMZN GOOGL, and MSFT all reported in the same week and all 4 had positive reactions to their reports. https://t.co/7Q06UdGTS9 pic.twitter.com/84flXtW0Di
— Bespoke (@bespokeinvest) July 29, 2022

*BEST BUY DROPS 11% AS 2Q COMPARABLE SALES TO DECLINE ABOUT 13%
— zerohedge (@zerohedge) July 27, 2022

The first recession where leisure/hospitality companies are doing earnings beats and raises I guess: pic.twitter.com/HX8hpBJ5eW
— Conor Sen (@conorsen) July 27, 2022

Just a crushingly sad paragraph:https://t.co/QGOOHDHmn3 pic.twitter.com/VDBiVMArW4
— Sarah Halzack (@sarahhalzack) July 26, 2022

Once people get used to a certain luxury, they take it for granted. Then they begin to count on it. Finally, they reach a point where they can’t live without it. pic.twitter.com/4t2hz9xGOE
— Yuval Noah Harari (@harari_yuval) July 12, 2022

What a chart, via @sarafischer.

Streaming gets “the highest percentage since [Nielsen] began its monthly reports in June 2021.” pic.twitter.com/5ke1dHRbek
— Carl Quintanilla (@carlquintanilla) July 26, 2022

The ultimate hunt between Predator and Prey began centuries ago. Stream #PreyMovie Aug 5, only on @Hulu. pic.twitter.com/yyDmIPX2pH
— 20th Century Studios (@20thcentury) August 1, 2022

Michael B. Jordan's Creed III has officially been delayed from Nov. 23, 2022 to March 3, 2023. pic.twitter.com/OgLc2aPxRa
— Rotten Tomatoes (@RottenTomatoes) July 28, 2022

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On today’s show we discuss:

Future Proof Festival

Listen here:

Recommendations:

Charts:

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BEN CARLSON, CFA

Get Some Common Sense

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On today’s show we discuss:

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BEN CARLSON, CFA

Get Some Common Sense

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