Are we headed for a recession? The stock market sure has been acting like it, with the S&P 500 nearing bear-market territory. US gross domestic product fell at a 1.4% annual rate in the first quarter, and another quarter of negative growth would officially mark a recession. So, we asked financial advisors: What are you telling clients about the potential for a recession, and how are you preparing them? Here are three answers.
Holly Newman Croft, wealth advisor, Neuberger Berman: We’ve been positioning portfolios for slower economic growth. Within fixed income, we’ve been staying very short duration: You can get a one-year muni bond yielding over 2%. We think that’s a good play. Within equities, we’ve been focusing on high-quality securities, as well as companies that have proven they can grow their dividends.
Michael Policar, founder, NGP Financial Planning: As the stock market declines, we are starting to use cash to buy stocks. We know that markets could go down further and are keeping cash in case it does, in order to buy at lower prices. So, we’re trying to take advantage of what the market’s doing, as opposed to coming at it from a position of fear.
Susan Kim, advisor, Ameriprise Financial
: My job is making sure none of my clients are cashing out at this time. That’s why people pay us money: to make sure they don’t make emotional decisions. For my retired clients, I’ve already set aside three years of their living expenses. More than 60 of my clients have been sending me extra cash. There’s a lot of stuff that’s on sale for anywhere from 40% to 60% off, and we’re in investing mode.
Advance Auto Parts and Zoom Video Communications report quarterly results.
JPMorgan Chase hosts its 2022 investor day. Shares of the largest US bank are down 26% this year, underperforming the KBW Bank Index by six percentage points, in part due to concerns of increased spending without clear-cut benefits.
Ralph Lauren, and Toll Brothers announce earnings.
The Census Bureau reports residential sales statistics for April. The consensus estimate is for a seasonally adjusted annual rate of 750,000 new single-family homes sold, slightly less than March’s 763,000.
S&P Global releases both its Manufacturing and Services Purchasing Managers’ indexes for May. Expectations are for a 57.8 reading for the Manufacturing PMI, while the Services PMI is seen coming in at 57. This compares with 59.2 and 55.6, respectively, in April.
Nvidia reports first-quarter fiscal-2023 results. Shares of the largest US semiconductor company by market value are down 43% this year, as investors have fled high-multiple growth stocks.
Bank of Montreal, Bank of Nova Scotia, Dick’s Sporting Goods,
and Snowflake release quarterly results.
and United Airlines Holdings hold their annual shareholder meetings.
The Federal Open Market Committee releases minutes from its early-May monetary-policy meeting.
The Census Bureau releases the durable goods report. Economists forecast that orders for manufactured durable goods rose 0.7%, month over month, in April, to $277 billion.
Alibaba Group Holding,
Autodesk, Burlington Stores,
Canadian Imperial Bank of Commerce,
Dell Technologies, Dollar General,
and Workday hold conference calls to discuss earnings.
The Bureau of Economics Analysis reports its second estimate for first-quarter gross domestic product. The consensus estimate is that GDP declined at a seasonally adjusted annual rate of 1.4%, unchanged from the BEA’s advance estimate, released in late April.
The BEA reports personal income and spending data for April. Income is expected to have risen 0.55%, month over month, while personal expenditures likely rose 0.6%, This compares with increases of 0.5% and 1.1%, respectively, in March.
Write to Steve Garmhausen at [email protected]
Credit: www.marketwatch.com /