We started the landing a couple months ago
We started the landing a couple months ago: Sevens Report Editor, Tom Essaye, Quoted in Barron’s
The Market Is Finally Paying Attention to Slowing Growth. That Doesn’t Mean We’re Headed for a Recession.
Sevens Report Research’s Tom Essaye argues the latest data doesn’t rule out a soft landing, though some market participants had until recently ruled out a hard landing.
“We started the landing a couple months ago,” Essaye says. “It’s no different than when you’re on an actual plane. Sometimes the plane descends more quickly than other times, but that doesn’t mean that you’re crashing.”
Essaye argues summer jobs numbers are generally volatile, so he doesn’t expect the Fed to start panicking. He also notes other economic metrics like retail sales and durable goods, while slowing, are not showing extreme weakness. On the flip side, he thinks a market that had been oblivious to slowing growth could show signs of weakness in the coming weeks.
“The data was not that bad,” Essaye says. “The fact that the S&P 500 is down two and a half percent is more a function of the market’s complacency toward this risk, rather than it is the risk actually becoming substantially greater.”
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