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"Recession Risk is Elevated, Raising Prospects of a Deeper Market Decline" Interview with Tom Samuelson on Money Life with Chuck Jaffe

Sep 21, 2022 9:16:06 AM

Tom-1-1"Recession Risk is Elevated, Raising Prospects of a Deeper Market Decline"– Interview with Vineyard Global Advisors Chief Investment Officer Tom Samuelson, CFA, CMT 

Vineyard Global Advisors Chief Investment Officer Tom Samuelson, CFA, CMT, joined Money Life with Chuck Jaffe for a frank conversation about the impact of a recession and what it means to investors.

In this interview, Chuck and Tom explore last week's inflation news and other current conditions that have increased the potential for a recession. He notes that the historical decline for a bear market with a recession is 35 percent, which will have the market testing June lows and likely going deeper, potentially dropping the Standard & Poor's 500 to the 3,000 to 3,200 range.

Enjoy this Podcast.

How The June Lows Determine Where We Go Next. Is a Recession Probable?

The Fed has aggressively raised interest rates. With inflation at 8.3%, it’s expected the Fed will raise an additional 200 basis points.  They’re going to take interest rates from two and one half to four and one half percent, increasing the probability of a recession.

Why Recessions Matter; the Proof Is In the Metrics. 

Recessions matter from two critical perspectives. One, people lose their jobs. Two, earnings go down, and stocks fall. For example, earnings in a typical recession decline by 20%, while stocks decline an average of 35%. That would take the S&P down to 3000 to 3200.

If We Face a Market Decline, When Can We Anticipate a Rebound?

Historically, a recession typically lasts about a year. If we establish the beginning of the recession as the second quarter of this year, that will take us out to April of next year. The good news is the market typically bottoms before the recession's end anywhere from one month to eight months. So we could see the beginnings of a rebound in the stock market towards the end of this year.

Listen to the Full Podcast Here....

Host: Chuck Jaffe, Money Life.

Guest: Tom Samuelson, CIO of Vineyard Global Advisors

 
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