All right, let's get a quick look at markets
before we bring in our next guest here. As
we can see mixed markets this morning, we got
the NASDAQ pointing up about a half a percent,
the S and P 500. Meanwhile pointing up about
3 10 of a percent and the dow has continued
to drop so down about 2/10 of a percent or
almost 60 points here. Now, I want to
bring in an Harris Chief Planning strategist at Platinum Bridge
Wealth Strategies and thanks for joining us. Welcome to
the show. What's your reaction so far to how
markets have opened this morning? Good morning. How
are you doing? So? Great, good,
good. Um I was listening to you earlier,
The Mark, the markets are sending some mixed,
mixed messages out here, right? I mean,
we have, as you mentioned, some of these
banks have come up recently with, with better than
expected earnings. At the same time, you're having
retail sales come down a bit indicating that the consumer
is starting to be a bit more concern. Uh
Everything that I'm seeing indicates that we should go into
some sort of recession. So we're having the,
the, the growth of our money supply has declined
at the most rapid pace in history. And the
the pace at which these rate hikes have been sued
is also historical record. So those two indicators alone
just scream a recession and we track yield curve relationships
from three month treasuries through 30 year treasuries. And
when we look at these multiple yield curve relationships,
so the three months to the five year, the
three months to the 10 year, three months to
the 30 year et cetera, we're seeing that it
peaked out at, at 90% of these yield curve
relationships were inverted, which historically has been, are
also an indicator of a recession. So I think
um there's been a lot of focus on whether we're
going into a recession when the fed may stop,
stop raising interest rates if and when they may pivot
, I think what's most important is just to kind
of take a step back and realize we don't have
a crystal ball and we, we've entered into a
situation that is unprecedented. So the fed's response to
COVID injected an additional$6 trillion into our economy and
we, we've never seen this before. So despite
the fact that there's been a decline in the money
supply, the the money circulating through this economy is
still over 35% higher than it was before the pandemic
. So we really are in uncharted waters here.
So I think it makes a lot of sense to
just build a portfolio that's resilient. That's a bit
more defensive as we kind of get through this certain
, this period that we're dealing with right now.
Absolutely. And, and I'm glad you brought up
that recession threat here. We actually did hear from
House Speaker Kevin mccarthy, speaking from the New York
Stock Exchange yesterday on the stalemate we've seen between Democrats
and Republicans on how much and how to hike the
debt ceiling here. You know, if there were
a debt default, we know that that could precipitate
a recession as well. So given this additional threat
, what do you think this possible recession is likely
to look like for the US economy? Well,
again, I think because the backdrop before the Fed
started to raise interest rates, the economy was actually
on pretty sound footing. So this is, this
is a little different situation than what we saw back
in 2008. Typically, we see more of an
organic type of recession that comes about for the economy
. This was done on purpose by the Fed to
rein in inflation. So we're in a situation now
where it's like, ok, we may go into
a recession. I believe it's gonna be relatively benign
. The debt ceiling situation is a real challenge for
this market. So back in 2011, when we
saw the debt ceiling issues come, come about the
market declined by 17% back in 2011. In response
to what was happening with this debt ceiling situation.
So that's something that could also be on the,
on the horizon in the summer time. And I
don't, I don't know if it's gonna be a
resolve, what I think is important. Unfortunately,
we're gonna have to, we're gonna have to let
it go because we're running out of time. But
thank you so much for your insight there. Ans
Chief Planning strategist at Platinum bridal strategies. Uh There's
more wake up with after the break.