The Contrarian Investor Podcast – The Contrarian Investor Podcast gives voice to those who challenge a prevailing narrative in global financial markets (contrarianpod.com)
Barry Knapp of Ironsides Macroeconomics rejoins the podcast to discuss his surprisingly sanguine view of the economy in 2023: Why cyclical stocks should outperform the technology and defensive sectors, and why he’s expecting inflation to drop to 3.5% by the second half of the year.
Inflationary recessions are different from deflationary ones. The last four were the latter. If there is a recession this year, it will be the former (02:18)
Earnings downside is limited in this scenario, by 5% based on what happened in similar situations in the past, and earnings should actually go up (5:56)
Tech margins should continue to be under pressure, but economically sensitive cyclical stocks should see margin expansion (10:50)
The US labor market has actually started to weaken considerably — and not due to Fed policy (12:18)
There have been some big adjustments in the labor market post-pandemic (16:47)
The ‘wealth destruction effect’ from tech stocks selling off is negligible (27:35)
One point of concern: the deficit. This is where the implosion in wealth could affect things (32:59)
The coming budget battle in Congress is worth paying attention to (34:41)
The ‘higher for longer’ Fed interest rate hike thesis has gained traction. What this means for stocks (43:27)
Inflation: Expect 3.5% CPI by mid-year (47:37)
Not intended as investment advice!
Barry C. Knapp
Managing Partner
Director of Research
Ironsides Macroeconomics LLC
908-821-7584
bcknapp@ironsidesmacro.com
https://www.linkedin.com/in/barry-c-knapp/
@barryknapp
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