Investors Go ‘All-In’ On The Soft Landing Narrative

Authored by Jesse Felder via The FelderReport.com,

Investors have now gone “all in” on the mushy touchdown narrative, identical to they did in 1989, 2000 and 2007.

Soft Landing Optimism Is Everywhere. That’s Happened Before. https://t.co/k1CX8VVg76 by @jeannasmialek pic.twitter.com/5tmLjYW9oE

— Jesse Felder (@jessefelder) July 27, 2023

Funny how they neglect every time that “it’s all about the lags.”

‘During the tightening cycle, the economic system sometimes expands at its quickest tempo, because it feeds off the lagged results of the prior interval of coverage lodging. It slows down precipitously within the two years that comply with the END of the Fed tightening cycle.’ https://t.co/VJs8z01qL9

— Jesse Felder (@jessefelder) July 27, 2023

But there’s one group that clearly hasn’t forgotten and that’s the parents within the c-suite.

‘As a proportion of corporations for which there was any insider exercise, these with web insider shopping for dropped to 12%. That proportion is decrease than for every other month over the previous decade.’ https://t.co/bYRrhlnlNd

— Jesse Felder (@jessefelder) July 26, 2023

And there are indications inside the markets that counsel their warning might be warranted.

‘There are only a few situations during which we’ve any particular expectations for near-term motion. One exception is when the market is strenuously overextended in a “trap door” state of affairs combining wealthy valuations with unfavorable internals.’ https://t.co/mX7CMUP9tT by @hussmanjp pic.twitter.com/dsJDhrxuXB

— Jesse Felder (@jessefelder) July 24, 2023

Longer-term, there could also be trigger for better financial volatility than the “soft Landing” narrative would counsel.

“It’s this paradox where we are investing massive amounts of capex in every possible sector; from biotech, to healthcare, to industrials, to new materials, except in commodities which you need to accomplish all these other goals.” https://t.co/qrzRxhGkk1

— Jesse Felder (@jessefelder) July 23, 2023

Thanks for studying and have an ideal weekend!

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