Latest news with #recessionrisk
Wall Street Journal
3 hours ago
- Business
- Wall Street Journal
Japan's Economy at Risk of Technical Recession, Revised Data Shows
TOKYO–Revised data confirmed that Japan's economy shrank in the first quarter, solidifying the risk of a technical recession. Real gross domestic product contracted 0.2% on an annualized basis in the January-March period, government data showed Monday. That compared with the 0.7% decline estimated initially. The economy was flat on quarter.
Yahoo
11 hours ago
- Business
- Yahoo
'No recession bet whatsoever': The stock market isn't pricing in any sort of economic downturn, investment firm says
A trend in the stock market shows investors are betting on continued US growth, one firm says. Historically, an increase in defensive valuations has preceded a recession, but that's not happening. Equity managers are acting like "there's no recession risk whatsoever," The Leuthold Group said. Investors are betting that the US economy will continue to grow and they're behaving as if there's "no recession risk whatsoever," market research firm The Leuthold Group wrote in a note last week. That conclusion is based on a key indicator, the S&P 500 Cyclical/Defensive Ratio, which compares the most economically sensitive sectors, like consumer discretionary, industrials, and materials, to more stable areas of the market such as consumer staples, healthcare, and utilities. The Leuthold Group calculates this metric based on price to earnings, price to cash flow, price to sales, and price to book ratios. Cyclical stocks typically trade at a discount during recessions because their earnings are more vulnerable to economic slowdowns. Investors, meanwhile, pay a relative premium for the safety of defensive stocks with more inelastic demand. In May, this ratio hit an all-time high of 1.19, indicating a 19% premium for cyclical stocks relative to defensive shares. This isn't an anomaly, as the ratio has held above 1.05 — placing it in the top 10% of historical readings — for 13 consecutive months. Recession fears have come down since reaching a fever pitch in April. After the announcement of a 90-day tariff pause and trade negotiations with China, the odds of a recession have fallen from 66% to 28% on prediction market Polymarket. However, several Wall Street strategists are still concerned, as a 28% chance of recession is still higher than the long-term average of around 15%. Torsten Sløk, chief economist at Apollo, and Jamie Dimon, CEO of JPMorgan, have been ringing the bell on stagflation concerns. According to The Leuthold Group, a 28% chance of recession is still far too high based on what the market is pricing in. Ahead of past recessions — including 2000, 2008, and 2020 — cyclical sectors were trading at steep discounts to their more stable counterparts. The average valuation gap at pre-recession market peaks was about 25% in favor of defensives. During these recessions, the average valuation gap increased to 38%. "Much of the recession 'discount' in the comparative valuations of Cyclicals occurred during the twelve months (or earlier) preceding the pre-recession stock market peak. Today, that process does not appear to have begun," the firm wrote. The elevated S&P 500 Cyclical/Defensive Ratio also reflects some valuation shifts that have occurred over the last few decades. Defensive stock valuations have been declining as long-term growth for consumer staples and healthcare companies slow down. These companies now trade at a 10% discount to the S&P 500, compared to a medium premium of 10% since 1990. During previous recessionary bear markets, defensives traded at a 33% premium relative to the rest of the market, suggesting room for a defensive comeback if recessionary fears return. If this does occur, investors heavily exposed to cyclicals will suffer the most. Investors are continuing to bet on the most economically sensitive parts of the market. As long as cyclical stocks retain their valuation premium against defensives, it seems like there's no recession scare to be worried about. Read the original article on Business Insider Sign in to access your portfolio
Yahoo
22-05-2025
- Business
- Yahoo
YAHOO POLL: Are you using more of your savings this year just to get by?
Singapore's economy may have started the year strong on paper, but rising costs and job worries may be pushing many households to crack open their savings jars more often. Q1 2025 saw 3.9 per cent growth year-on-year, but behind the headline lies a quarterly GDP contraction of 0.6 per cent – a sign that the good times might not last. And with warnings of a technical recession if the slide continues, more Singaporeans may be asking: will our savings hold out? Other polls YAHOO POLL: Do you agree with SDP's push for election system reform? YAHOO POLL: Do you support harsher punishments for animal abusers? YAHOO POLL: COVID-19 cases on the rise – are you staying vigilant? Much of that early growth came from businesses front-loading activity before new tariffs took effect. That short-term boost has fizzled, and with sectors like finance, manufacturing, and retail softening, job security isn't a given. Prices remain high, interest rates are sticky, and wage growth has stalled. Many could be finding themselves dipping into emergency funds – just to make ends meet. Are you feeling the pinch? Have your financial habits changed this year? Have your say and take the poll. Related Why Singapore's economy may shrink this year Singapore flags recession risks after strong start to 2025 Singapore sees technical recession risk after Q1 contraction Singapore maintains previously lowered full year GDP forecast at 0 - 2% on 'significant uncertainty' ahead
Bloomberg
13-05-2025
- Business
- Bloomberg
JPMorgan Drops US Recession Call After US-China Trade Truce
JPMorgan Chase & Co. boosted its forecast for US economic growth after a temporary trade deal between the US and China, dropping its earlier call that the world's largest economy would sink into a recession in 2025. 'The administration's recent dialing down of some of the more draconian tariffs placed on China should reduce the risk that the US economy slips into recession this year,' JPMorgan Chief US Economist Michael Feroli said Tuesday in a note. 'We believe recession risks are still elevated, but now below 50%.'
