Investors Have Been More Keen On Buying Inventories Than Stocks Post Recession Worries

published on: August 7, 2023 last updated on: November 30, 2023
Investors Have Been More Keen On Buying Inventories Than Stocks

A visible majority of investors have expected a recession in the US before 2024, which has led them to view the recent bull market in stocks as transitory and to favor the US long-term Treasuries- Bloomberg.

That has been the takeaway from the newest Markets Live Pulse Survey, which had shown that roughly two-thirds of the total 410 respondents are expecting a downturn in the biggest economy in the world by the end of 2024.

A minority of 20% of the respondents even see a collapse in 2023, at a time when the own staff of the Federal Reserve have abandoned the forecast of the recession altogether.

The respondents of the survey seem to have been looking past the current resilience of the economy and anticipating more damaging ruffle effects from the Fed’s 5.25% points of cumulative tightening throughout the last 16 months.

The Federal Reserve had lifted its threshold rate to its highest in more than two decades in the previous month and Chair Jerome Powell hinted for additional possible hikes.

The results of the polls are consistent, with Fed pricing funds futures, which had shown that the traders hope for the central bank to cut down interest rates many times in 2024, by higher than 1% aggregate, apparently as a response to the eventually ascending economic weakness.

However, the upshot in this situation is the fact that investors have seen value in long term Treasuries, that had yields last week to a point where it threatened to test the multi-year highs that were last touched in October.

As they list their choices for allocation for the next year, the respondents of the survey seem to be quite unbothered by previous week’s bond market slide, which appeared against the backdrop of the announcement of the Treasury that it might boost issuance, as the ratings by Fitch downgraded US sovereign debt.

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upasana sarbajna

Upasana is a budding journalist who has a keen interest in writing. She considers writing as therapeutic and is most confident when she writes. She is passionate about music, movies and fashion. She writes in a way that connects with the audience in a personal level. She is optimistic, fun loving and opinionated.

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