We are not in a recession!
Just kidding... The first read on second quarter GDP is set to come out on Thursday and it is likely to be negative for the second quarter in a row. Before last Thursday, that was the definition of a recession. Since then, the White House has tried to change the definition. You can read their manifesto here : https://www.whitehouse.gov/cea/written-materials/2022/07/21/how-do-economists-determine-whether-the-economy-is-in-a-recession/
Ironic they would come out one week before the release of the data to change the rules. Have to think this just confirms that the GDP number will be negative and they are just trying to get ahead of the headlines and subsequent scrutiny.
The stock market is the greatest pricing mechanism on the planet. Who knows if we are out of the woods just yet, but the Nasdaq is setting up for its best monthly performance in 2 years.
This week we have the Fed decision, the 2Q GDP(as mentioned), and a slew of earnings lead by mega-cap names like AMZN, AAPL, GOOGL, MSFT, and META. If we start seeing green moves on inline reports, maybe we can begin saying some of ugly noise is priced in and markets can find some footing into September.
That $400 handle on the $SPY found sellers Friday, so would want to see that break and hold in the next few sessions. Once that falls a move to $410 or so is possible:
Happy Recession Trading!
-JB