CEO Gloom Opens Pathway To Tech Stock Resurgence

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Most corporate leaders now expect a recession as early as next year. This is what it means for investors.

A survey released Friday from the conference board shows 60% of corporate suite executives are confident the economy will contract by 2023. Fifteen percent believe the recession has already begun.

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This is a big red flag with one caveat for investors in the near future.

During the last two decades the world has been building most of its factories in Asia, especially China. At the same time, the rise of environmental, social and corporate governance investments made it difficult for capitalists to invest in fossil fuels, passing power to Saudi Arabia and Russia. Unfortunately, neither of these countries is particularly friendly towards the West.

Now the Chinese government is randomly closing domestic factories, creating supply chain constraints. Russia is at war with Ukraine, creating commodity shortages for grain, oil and natural gas. And Saudi Arabia refused to pump more oil to cushion the price shocks.

Interest rates are rising to reduce inflation in the United States and around the world. It’s a complete mess without an easy fix. It’s no surprise that CEOs are worried.

conference board Survey 750 CEOs and other C-suite level executives were hired. They were asked about their feelings about the war in Ukraine and how their businesses were being affected, the risks of supply chains, cyber security, contingency planning and innovation. The outlook was serious.

Among the companies belonging to ESG, corporate leaders were the most pessimistic. According to the report, some 42% saw a recession by the middle of 2022, with an additional 40% expecting a recession in the next two years.

This is an unprecedented era.

Only two years after the global pandemic plunged the world economy into recession, central bankers around the world are creating yet another bank to curb inflation.

The Federal Reserve last week raised short-term rates by 75 basis points, the biggest increase since 1994. and Fed Chairman Powell did not deny More big additions in future meetings.

CEOs see margin compression. They are battling high raw material prices as well as rising interest rates. Worse, they are concerned about competing economic blocs because Chinese and US economic interests differ. The era of low-cost, Chinese-made goods may be coming to an end, and with it may come a price drop.

Jamie Dimon, CEO ET JP Morgan (JPM), Earlier this month, it warned that the global economy was facing an economic storm. Jane Fraser and James Gorman, CEOs at Citigroup (C) And Morgan Stanley (MS) are measured respectively. Both see the potential for a recession to escalate, yet it can be avoided.

Somewhere in the middle is Tesla’s Elon Musk. in an email obtained By ReutersMusk told Tesla executives he had a “super bad feeling” about the economy. He then instructed managers to start cutting 10% of salaried employees in anticipation.

There is some good news though.

Corporate leaders are still committed to automating their workflows and investing in new technologies to protect digital data. This means more investment in cloud-based technologies and cyber security. Together, this is a continuation of the wave of digital transformation that was responsible for creating so much investor wealth during 2020 and 2021.

Unfortunately, the underlying tech stocks are nowhere near the start of a new uptrend. Most of the shares are trading well below their key resistance levels, including the all-important 200-day moving average.

Although I am not suggesting any new investments at this time, investors would be wise to look to leaders in the field like this. Microsoft (MSFT), Palo Alto Networks (PANW)And MongoDB (MDB)A rapidly growing manufacturer of next generation databases.

If corporate leaders are any indication, the rest of 2022 could be a whirlwind for investors. Storm clouds are definitely on the horizon. That said, the big digital tailwind remains.

See Price Action for Leaders. When they start to rise, the next leg will start to rise higher.

To learn how to dramatically improve your results in the market by buying options on stocks like Ford and Tesla, take a two-week trial for my exclusive service, strategic choice, click here, members have made more than 5 times his money this year,

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