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Prudential’s chief market strategist says the recession “tug-of-war” in the market won’t abate until there’s clarity in the data.

April 01, 2019

Highlights:

  • Patience remains the Fed’s new watchword
  • An inverted yield curve demands attention
  • Pragmatism rules the day amid recession tug-of-war

Typically, the arrival of April portends the green shoots associated with longer days and sunnier skies of spring. The brackets frenzy of the March Madness ritual also helps usher in the second quarter of the year. Soon, the earnings season takes center stage and analysts and investors alike determine how they expect the rest of the year to unfold. The transition from one quarter to the next is usually fairly straightforward. This year, however, may prove exceedingly different as questions abound over the strength of the global economy, with the U.S. economy—still on solid footing—under the microscope for signs of strength or weakness.

Internet searches for “inverted yield curve” and “recession” have picked up markedly, perhaps helping to explain the unexpected drop of the Conference Board Consumer Confidence Survey at the end of March, despite February’s rebound. While the all-important consumer was more concerned about current economic conditions, including the job market in general, U.S. consumers were more confident about the future. For example, intentions improved for vehicle purchases, as well as home-buying. At the end of March, the University of Michigan’s Consumer Sentiment Index was revised higher, reflecting a more optimistic assessment for both current and future expectations.

The Conference Board’s senior director of economic indicators explained, “Confidence has been somewhat volatile over the past few months, as consumers have had to weather volatility in the financial markets, a partial government shutdown and a very weak February jobs report. Despite these dynamics, consumers remain confident that the economy will continue expanding in the near term. However, the overall trend in confidence has been softening since last summer, pointing to a moderation in economic growth.”

 

Read Quincy Krosby’s full Q2 2019 market commentary: “Crosscurrents

 

To talk to Quincy Krosby about her views of the market, contact Lisa M. Bennett.

The views and opinions are those of the author at the time of publication and are subject to change at any time due to market or economic conditions. This document has been prepared solely for informational purposes. This is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.

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Media Contact(s)

Lisa M. Bennett

973-802-2894