SKIP FRIDAY <– THANKSGIVING
EATING TURKEY IS CONSENSUS: Belief in a "hard landing" as ubiquitous
The conviction that the US is hurtling towards/or already in a recession is ubiquitous. Many can cite a litany of statistics such as:
- inverted curve,
- Fed hikes so fast and so high, it is going to break something,
- plunge in PMIs,
- collapse in CEO sentiment,
- commodity price movements
- inflation will take "years to control"
- earnings estimates will fall
- S&P 500 is below the 200D moving average and every rally has failed there
Belief in this coming "hard landing" is as widely held as eating turkey on Thanksgiving day.
- 88% of Americans eat turkey on Thanksgiving
- Is there any other day where something is this ubiquitous?
- based on our conversations, this 88% is lower than the % who expect a recession in 2023
Markets are not fighting the Fed if inflation is cooling...
The minority view, which is also mine, is that much of the US inflationary pressure in 2022 has transitory components:
- supply chain,
- bullwhip effect,
- one-offs like healthcare insurance
- even services like travel had "revenge spend" (not last forever)