Ouch! The S&P 500 ended the first half of the year with its worst performance since 1970, down more than 20%, cementing its bear market status. And the recession drumbeat is getting louder. This morning, leading Wall Street economist, Nancy Lazar told clients “a recession is coming sooner than you think” Piper-Sandler’s Global Chief Economist blames “sticky inflation”, “very aggressive Fed tightening, and a “severe corporate profit recession” for her forecast of a mild recession with the economy contracting starting in the final quarter of this year into the first half of next year.

But this week’s WEALTHTRACK guest is way ahead of her and the few others just joining the recession club. He’s been warning clients about the likelihood of a downturn for months.

Our guest is David Rosenberg, President, Chief Economist, and Strategist at his independent economic consulting firm Rosenberg Research which he founded in January 2020.

High inflation is at the top of the Federal Reserve’s, Washington’s, and Wall Street’s list. Rosenberg says they are looking at the wrong numbers and that disinflation is already taking hold.

Interest rates are expected to go higher for longer. Rosenberg cites evidence of economic slowing which will require easing sooner than expected.

As I just mentioned, the likelihood of recession is still being debated. Rosenberg is forecasting a recession this year.

What about the already steep bear market decline? Rosenberg warns about the lure of bear market rallies.

Which prevailing views is Rosenberg challenging now?

WEALTHTRACK Episode #1901 broadcast on July 01, 2022

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DAVID ROSENBERG

Chief Economist & Strategist,
Rosenberg Research

ACTION POINT

CONSIDER PUTTING SOME 2-YEAR TREASURY NOTES IN YOUR PORTFOLIO

Two-Year Treasuries benefiting from rapidly rising short-term interest rates
Competitive with yields on longer-term Treasuries without risk of holding bonds maturing in many years
Find more information about buying directly from the U.S. Treasury, commission-free, at treasurydirect.gov

ONE INVESTMENT

RECESSION BENEFICIARY

Buy the 30-year U.S. Treasury Bond

Bond yields always go down in a recession
Long maturity bonds are the most sensitive to declining interest rates
Bonds make money in a recession

WEB EXTRA

LEARNING CURVE

Having spent years as a top-ranked economist at Merrill Lynch, Dave Rosenberg relocated to his hometown of Toronto, Canada over a decade ago, first at asset management firm, Gluskin Sheff then setting up his own firm Rosenberg Research in 2020. He talks about the difference the move has made in his professional views.