As market jitters rise and whispers of a looming recession grow louder, a clutch of financial experts continues to debate whether the storm will truly break or if the economy is setting the stage for another expansion. Such uncertainty calls to mind the adage, “economists have predicted nine of the last five recessions.”
This time, it is an intertwined narrative of skepticism, expansion optimism, and widespread recession anticipation.
The US Economy May Have Entered an “Expansion Phase”
Wall Street’s most bullish analyst, Tom Lee of Fundstrat Global Advisors, stands firm in his conviction. He argues the economy is not sliding into recession but, rather, slipping into an expansion phase.
Lee’s arguments pivot on a cocktail of factors – falling commodity prices, a recovering supply chain, and an invincible labor market.
“I think these are conditions for profits to actually outperform, and at a time when investors’ positioning has been so offsides. I do not think stocks are overextended. I think the FANGs did the heavy lifting [in this year’s rally]. And if we are slipping into an expansion, a lot of other names are going to participate,” said Lee.
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Author: Bary Rahma
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