Shutterstock
CEOs are preparing for recession, and one risk management expert says it could be the worst in recent history. How many more times will the Fed raise interest rates? The SSA is poised to announce the largest COLA ever, plus more financial news.
October kicked off with a stock market rally on Monday, with the Dow rising 765 points, or 2.7%, the biggest gain since mid-July. The NASDAQ gained 2.3%, and the S&P 500 gained 2.6%, CNN Business reported.
Following a series of interest rate hikes by the Federal Reserve, most major CEOs don’t believe the US economy will experience a soft landing. According to a recent survey of 400 CEOs of large US companies by consulting firm KPMG, they found 91% are predicting a recession in the next 12 months, CNN Business reported. According to the CEOs surveyed, only 34% believe the recession will be short or mild.
According to investment research firm Hedgeye Risk Management, not only do they foresee a recession, but they believe it will be the largest ever, MarketWatch reported.
“There’s no dovish pivot,” says Keith McCullough, founder and CEO. He believes stocks and bonds will remain bearish because the damage has been done–and the Federal Reserve is “far too late.”
“Just like it was impossible for them to stop inflation,” McCullough says, “it’s impossible for them to stop the pending U.S. corporate profit recession or the mainline recession.”
McCullough added: “I recommend prayer.”
According to market veteran Ed Yardeni, the Federal Reserve will raise interest rates one more time in November and then stop to avoid breaking markets, Yahoo reported.
“I think it’s already breaking,” Yardeni told BloombergTV. “What’s breaking is the soaring dollar. A soaring dollar has been associated in the past with creating financial crises on a global basis.”
“We have to have a global perspective on all of this,” Yardeni continued, “and this tight monetary policy here is having a tremendous impact on the rest of the world, especially in emerging markets.”
“I think they have one more rate hike coming in November and that will be it because the financial stability issue will pop up as a primary concern,” Yardeni added. “I see earnings going sideways. I think we’re already in a recession, it’s just a growth recession.”
The Social Security Administration is poised to announce its highly-anticipated cost-of-living adjustment (COLA). A preliminary forecast suggests it could be the largest year-over-year percentage increase in 41 years, the Motley Fool reported. The forecast is pointing to an 8.7% COLA for 2023. The official announcement is ten days away.
