Recession Risks Are Back on the Rise

Deteriorating expectations in the soft data are bad news for economic activity

Highlights

• Deteriorating expectations in the soft data are bad news for economic activity

• Small and mid-cap equities — both highly economic-sensitive — are deep in correction terrain

• “Uncertainty” dominates Powell’s press conference

• A weak loonie and economic nationalism are boosting Canada’s tourism-related demand

Key Takeaways

• Growing Concerns Over Recession: “There’s a lot of economic uncertainty at the moment.” That message came from Bank of England Governor Andrew Bailey yesterday and echoed Jay Powell’s sentiments the day before. The quote is also consistent with the page B1 article in today’s NYT (A Trump Recession?) and comments coming from DoubleLine’s Jeffrey Gundlach on CNBC after the FOMC meeting (“we’re getting closer to recession”).