The US Federal Reserve’s subsequent assembly is rapidly approaching, and traders have questions in regards to the financial system.
Chief amongst them is whether or not the nation is heading towards a recession. Talking to the Investing Information Community, Marc Lichtenfeld, chief earnings strategist on the Oxford Membership, mentioned he is been backing away from that forecast for a while.
For one factor, US unemployment is close to document lows whereas wages are growing. “It is troublesome to have a recession with a state of affairs the place everyone’s working and getting paid extra,” he famous. For one more, the inventory market has been scorching in 2023.
“Typically talking, if everyone coming into this 12 months was very nervous a couple of recession, after which the market takes off the way in which it has, that is a powerful sign that we might not get that recession that we’re all anticipating,” Lichtenfeld mentioned.
Nevertheless, different indicators recommend a recession is certainly on the horizon. These embrace the inverted yield curve, in addition to a falling Chinese language producer worth index. “No matter what the trigger is, if these costs proceed to return down that also needs to deliver costs additional down within the US. At this level it is somewhat troublesome to see precisely what impact that may have,” he mentioned.
Emphasizing that he is not a permabull, Lichtenfeld mentioned he is bullish on gold and most metals on this setting.
“Proper now I’m bullish on gold. The primary purpose is the US greenback has been falling. We had been close to 20 12 months highs not that way back, however it has been falling fairly quickly over the previous couple of months, and so gold is a superb hedge towards that,” he famous. “Additionally, although inflation is coming down it has been considerably greater, and simply usually for the long run gold is an effective hedge towards inflation. So when you do imagine that there is nonetheless some inflation left to be labored out, then that is one more reason to personal some gold.”
Watch the interview above for extra of Lichtenfeld’s ideas on different commodities, his technique for investing in dividend shares and the place he sees essentially the most engaging dividends in the intervening time.
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Securities Disclosure: I, Charlotte McLeod, maintain no direct funding curiosity in any firm talked about on this article.
Editorial Disclosure: The Investing Information Community doesn’t assure the accuracy or thoroughness of the data reported within the interviews it conducts. The opinions expressed in these interviews don’t replicate the opinions of the Investing Information Community and don’t represent funding recommendation. All readers are inspired to carry out their very own due diligence.
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