Market Minute - May 2023

In Samuel Becketts’ play Waiting for Godot, the two main characters sit around all day talking and anticipating when Godot will  finally appear. He never arrives. Today, practically everyone is anticipating a recession and positioning for one. Is it possible, that,  like Godot, it never shows up? Sure, anything is possible. But let’s think about the consequences of that for a moment.  

If we avoid a recession, will the Federal Reserve (Fed) cut rates significantly and quickly? Probably not. Will inflation get to  the Fed’s 2% goal without a recession and higher unemployment? Unlikely. So, in our view, a soft landing would mean a  tougher inflation fight and higher rates for longer even if the Fed pauses for a while. Not great news for stocks nor a recipe  for high earnings growth.

Click here to continue reading.

Posted on Thursday, May 4, 2023 @ 8:31 AM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.